How Was Life?

How Was Life?

Global Well-being since 1820 You do not have access to this content

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02 Oct 2014
Pages:
272
ISBN:
9789264214262 (PDF) ;9789264214064(print)
DOI: 
10.1787/9789264214262-en

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How was life in 1820, and how has it improved since then? What are the long-term trends in global well-being? Views on social progress since the Industrial Revolution are largely based on historical national accounting in the tradition of Kuznets and Maddison. But trends in real GDP per capita may not fully re­flect changes in other dimensions of well-being such as life expectancy, education, personal security or gender inequality. Looking at these indicators usually reveals a more equal world than the picture given by incomes alone, but has this always been the case? The new report How Was Life? aims to fill this gap. It presents the first systematic evidence on long-term trends in global well-being since 1820 for 25 major countries and 8 regions in the world covering more than 80% of the world’s population. It not only shows the data but also discusses the underlying sources and their limitations, pays attention to country averages and inequality, and pinpoints avenues for further research.

The How Was Life? report is the product of collaboration between the OECD, the OECD Development Centre and the CLIO-INFRA project. It represents the culmination of work by a group of economic historians to systematically chart long-term changes in the dimensions of global well-being and inequality, making use of the most recent research carried out within the discipline. The historical evidence reviewed in the report is organised around 10 different dimensions of well-being that mirror those used by the OECD in its well-being report How’s Life? (www.oecd.org/howslife), and draw on the best sources and expertise currently available for historical perspectives in this field. These dimensions are:per capita GDP, real wages, educational attainment, life expectancy, height, personal security, political institutions, environmental quality, income inequality and gender inequality.

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  • Foreword

    In 2001, the OECD Development Centre released Angus Maddison’s book, The World Economy – A Millennial Perspective, which was soon to become a classic in economic history for statisticians, economists and historians. Angus had a very long association with the Organisation for Economic Cooperation and Development (OECD), which he joined in 1953, and was one of the founding fathers of its Development Centre. This enthusiastic and thought-provoking "chiffrephile" – as he used to call himself – devoted much of his career to quantifying and analysing long-term growth in output as well as achievements in development and social welfare over the past millennium in as many countries of the world as possible. In doing this, he greatly contributed to one of the core missions of the OECD: providing the evidence for policy-making.

  • Preface

    In 2011, the Organisation for Economic Cooperation and Development (OECD) published the report How’s Life? Measuring Well-Being. This was the flagship publication of its Better Life Initiative, which aims to develop a new approach to the measurement of well-being, stressing its multi-dimensional character. The report was "a first attempt at the international level to go beyond the conceptual stage and to present a large set of comparable well-being indicators for OECD countries and, to the extent possible, other major economies". It was an important contribution to the "GDP and beyond" debate, which in recent years received new impetus from the Stiglitz, Sen and Fitoussi report in 2009.

  • Readers' Guide

    Throughout the report, data shown for world regions and for the world as a whole are population-weighted averages. The coverage of countries typically increases as more country data become available for more recent periods. In order to ensure more meaningful trends for world regions over time, imputations are made for missing countries. This adjustment procedure is explained in .

  • Executive summary

    How was life in 1820, and how has it improved over time? Our view on socio-economic development since the Industrial Revolution is to a large extent based on the evidence produced by historical national accounting in the tradition of Simon Kuznets and Angus Maddison. But trends in gross domestic product (GDP) per head do not fully reflect the various dimensions of well-being, such as life expectancy, education, personal security or inequality. Increasingly, measures of current human development are framed in terms of well-being rather than in solely economic terms, but can we do the same for the lives of our ancestors?

  • Global well-being since 1820

    This chapter provides an introduction to, and summary of, the contents of this book. It outlines the aim of the project and provides an overview of the indicators covered, comparing them with those used in the OECD Better Life Initiative. The chapter also presents the criteria used throughout the report to assess the quality of the indicators used, and discusses practical issues concerning country and period coverage and calculation of regional trends. Finally, the chapter summarises the content of each chapter and their main highlights.

  • Demographic trends since 1820

    The world population has grown from about 1 billion at the start of the 19th century to more than 7 billion today. This chapter describes how demographic systems rapidly changed around the world: mortality rates declined while fertility rates declined as well, albeit at lower and varying speeds. The first demographic transition took place in Western Europe and the Western Offshoots during the 19th century and had huge consequences for labour force participation, for the role of women, and for educational investment in children. Elsewhere the transition is still ongoing as new technologies in health and fertility control were introduced in the course of the 20th century, initiating a move away from high mortality and fertility rates to longer life expectancy and fewer children per women. Initially, this provided a demographic dividend facilitating economic growth, but soon this will turn into a demographic burden.

  • GDP per capita since 1820

    Since 1820, the world economy experienced spectacular growth in output and income. This chapter builds upon the work by Angus Maddison and shows that the world’s average GDP per capita increased by a factor of 10 between 1820 and the 2010. Yet, this growth was spread very unevenly, resulting in a considerable increase in average income disparities between countries. In 1820, the richest countries were about five times as wealthy as the poorest countries, whereas they were more than thirty times as well-off in 1950. This divergence was driven by a process of rapid industrialisation. Only recently, as a result of the rapid growth experienced by China and India, has global income inequality begun to decline. The chapter discusses the strong and weak spots in our current knowledge on historical GDP series and points to areas for future research.

  • Real wages since 1820

    Wages are an important element of well-being, as they directly affect material living conditions. This chapter describes trends in real wages since 1820 for a wide set of countries derived with a standardized method that allows for comparisons over time and space. The main indicator is based on the real wage of an unskilled male labourer in the building industry. Its derivation is based on data on nominal wages adjusted by the price of a subsistence basket of goods. Strengths and weaknesses of this method are discussed. It is found that during the first half of the 19th century, real wages in large parts of the world were barely above subsistence, except for parts of Western Europe and in particular in the Western Offshoots. As in the case of GDP per capita, cross-country differences in real wages increased rapidly since 1820, and diminished in the late 20th century.

  • Education since 1820

    Education provides many direct and indirect benefits to people’s well-being. This chapter relies upon two indicators to describe educational inequalities around the globe since 1820: literacy rates and years of schooling. These indicators are based on merging two major datasets that rely mainly on population census data, and that have various strengths and limitations. The chapter shows that trends in education have a tight relationship with those in GDP per capita. In 1820, less than 20% of the world’s population was literate, and this group was heavily concentrated in Western Europe and the Western Offshoots. Nowadays, levels of literacy are close to 100% almost everywhere, with Africa being the most significant exception (at 64%). In the wake of the expansion of basic education, secondary and tertiary education also expanded in all parts of the world, first in the Western Offshoots, then in Western Europe. More recently this became a global phenomenon, resulting in a strong increase in the average years of education of the world population, from around 1 year in 1870, to 3 years after the Second World War, to more than 7 years in the new millennium.

  • Life expectancy since 1820

    Health status is a key dimension of well-being. This chapter describes long-term trends in life expectancy at birth by combining a wide variety of international databases, while maintaining some coherence in the methods used. In addition, the chapter presents data on the infant mortality rate. It shows that, on a global scale, life expectancy at first diverged in the late 19th and early 20th century, reflecting higher life expectancy in Western Europe and the Western Offshoots. From the second half of the 20th century onwards, life expectancy improved in other parts of the world as well (with the exception of Sub-Saharan Africa), leading to a global convergence in life expectancy. Within the world’s regions, levels of life expectancy appear to have started diverging once more during the last three decades.

  • Human height since 1820

    Average height is an important indicator of people’s well-being. It is also a relatively undistorted and easy-to-measure indicator, which makes it particularly suitable for comparisons across time and space. Drawing upon an extensive body of research, the chapter describes the strengths and weaknesses of this indicator. It finds that during the 19th century, average height in Western Offshoots was much higher than elsewhere. Differences between Western Europe and the rest of the world (Eastern Europe, East Asia) were marginal, in spite of the much higher real incomes in the former region. This changed after about 1870, when people’s height began to increase in Western Europe, whereas this lagged behind elsewhere. Africans were relatively tall during much of the period studied, but experienced declining height in many countries after the 1960s. People in Southeast Asia stayed relatively short throughout the period.

  • Personal security since 1820

    Personal security reflects a crucial component of well-being. This chapter relies on homicide rates (the number of intentional deaths per 100 000 inhabitants) to trace changes of violence in time and space. It finds that Western Europe was already quite peaceful from the 19th century onwards, but homicide rates in the United States have been high by comparison. Large parts of Latin America and Africa are also violent crime "hotspots", and so is the former Soviet Union (especially since the fall of communism), while large parts of Asia show low homicide rates. Homicide rates are in general negatively correlated with GDP per capita – the richer a country, the lower the level, but there are important exceptions. In addition, the chapter describes changes in the probability that a random individual lives in a country experiencing an armed internal or external conflict.

  • Political institutions since 1820

    Political institutions determine the degree of freedom people enjoy and their capacity to influence their social and political environment. This chapter provides historical evidence on the evolution of political institutions drawing upon two major research projects: the PolityIV dataset and the Vanhanen dataset, which focuses on electoral participation and competition. Strengths and weaknesses of both databases are discussed. The chapter shows that global averages are tending to rise according to both datasets, but with significant differences in timing. Both datasets also show that the Western Offshoots and Western Europe took the lead in this process, while other parts of the globe often experienced a much less gradual evolution, with occasional violent swings in political rights. Yet in the long run, there has been an impressive improvement in the quality of political institutions worldwide.

  • Environmental quality since 1820

    The quality of the environment is obviously important for well-being, not only because of the role it plays as a source of raw materials, now and in the future, but also for human health and because of humans’ appreciation of nature. This chapter presents historical trends in sustainability and environmental quality based on measures of biodiversity and of emissions of CO2 and SO2. It documents long-term declines of biodiversity worldwide, as well as increasing emissions. These indicators are mostly model based: biodiversity measures are derived from the renowned GLOBIO model, while CO2 and SO2 emissions are mostly based on energy production. The chapter describes the assumptions and limitations of both indicators, including a warning about the partial and possibly biased nature of these indices, which give only a glimpse of the complex interactions between humanity and nature.

  • Income inequality since 1820

    This chapter focuses on income inequality as measured by gross (i.e. pre-tax) household income across individuals within a country. It builds upon a number of large-scale initiatives to chart income inequality trends over time, supplementing them with data on wages and heights for the earlier period. Income inequality trends follow a U-shape in most Western European countries and the Western Offshoots. It declined between the end of the 19th century until about 1970, followed by a rise. In Eastern Europe, communism resulted in strong declines in income inequality, followed by a sharp increase after its disintegration in the 1980s. In other parts of the world (China in particular) income inequality is on the rise recently. The chapter also provides evidence on the global income distribution, i.e. assuming all people belong to the same community. This distribution was unimodal in the 19th century, became increasingly bi-modal between 1910 and 1970 and suddenly reverted back into a unimodal distribution between 1980 and 2000.

  • Gender inequality since 1820

    Historically, gender inequalities in health status, socio-economic standing and political rights have been large. This chapter documents gender differences in life expectancy and birth rates (to cover health status); in average years of schooling, labour force participation, inheritance rights and marriage age (to cover socio-economic status); and in parliamentary seats and suffrage (to cover political rights). A composite indicator shows strong progress in reducing gender inequality in the past 60 years in most regions. Only in East Asia and in Eastern Europe this decline stalled in the 1980s. Differences in levels of gender inequality between regions remained large, however: Europe (including Eastern Europe) and the Western Offshoots performed best, although no country reached full gender equality. The Middle East and North Africa (mainly due to weak political rights) and South and Southeast Asia (due to skewed sex ratios at birth) performed worst.

  • A composite view of well-being since 1820

    This chapter provides a parsimonious overview of the trends in various well-being dimensions covered in the previous chapters by constructing a composite index of well-being. It discusses the crucial problem of choosing a set of weights to calculate such a composite index. Related problems include normalisation of individual indices and dealing with missing observations. The chapter discusses the advantages of various options, and their implications for the final results. It finds that empirically a wide range of aggregation methods generate comparable results. They all indicate that progress in well-being was commonplace since the early 20th century, with the possible exception of Sub-Saharan Africa. It is also found that since the 1970s between-country inequality in composite well-being is lower than in GDP per capita, while being more pronounced in the period before.

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