Growth, Inequality, and Social Welfare : Cross-Country Evidence

Social welfare functions that assign weights to individuals based on their income levels can be used to document the relative importance of growth and inequality changes for changes in social welfare. In a large panel of industrial and developing c...

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Bibliographic Details
Main Authors:	Dollar, David, Kleineberg, Tatjana, Kraay, Aart
Format:	Policy Research Working Paper
Language:	English en_US
Published:	World Bank, Washington, DC 2014
Subjects:	ABSOLUTE INEQUALITY ABSOLUTE POVERTY ABSOLUTE VALUE ADVERSE EFFECTS AGGREGATE GROWTH AGRICULTURE AMERICAN ECONOMIC REVIEW ANNUAL GROWTH ANNUAL GROWTH RATE ANNUAL RATE AVERAGE ANNUAL AVERAGE CHANGE AVERAGE GROWTH AVERAGE GROWTH RATES AVERAGE INCOME AVERAGE INCOME GROWTH AVERAGE INCOMES AVERAGE LIVING STANDARDS BENCHMARK BLACK MARKET BLACK MARKET PREMIUM BUDGET DEFICITS CAPITAL ACCOUNT CHANGES IN INEQUALITY CHANGES IN POVERTY CIVIL LIBERTIES COEFFICIENT OF INEQUALITY COUNTRY EFFECTS CROSS-COUNTRY DIFFERENCES CROSS-COUNTRY INCOME CROSS-COUNTRY REGRESSION CUMULATIVE DISTRIBUTION CUMULATIVE DISTRIBUTION FUNCTION CUMULATIVE INCOME CUMULATIVE INCOME SHARES DATA AVAILABILITY DECREASING FUNCTION DENSITY FUNCTION DESCRIPTIVE STATISTICS DEVELOPED COUNTRIES DEVELOPING COUNTRIES DEVELOPING WORLD DEVELOPMENT ECONOMICS DEVELOPMENT POLICY DEVELOPMENT RESEARCH DISTRIBUTION COMPONENT DISTRIBUTION OF INCOME DISTRIBUTION OF INEQUALITY DISTRIBUTIONS OF INCOME DYNAMIC PANEL ECONOMETRICS ECONOMIC GROWTH ECONOMIC LITERATURE ECONOMIC POLICY ECONOMIC REVIEW ECONOMIC STUDIES EDUCATIONAL ATTAINMENT ELASTICITY EMPIRICAL ANALYSIS EMPIRICAL EVIDENCE EMPIRICAL GROWTH LITERATURE EMPIRICAL LITERATURE EMPIRICAL MODELS EMPIRICAL RESULTS EMPIRICAL WORK ERROR TERMS ESTIMATED COEFFICIENT ESTIMATED COEFFICIENTS EXCHANGE RATE EXPLANATORY VARIABLES EXPORTS EXTREME POVERTY FINANCIAL DEPTH FINANCIAL DEVELOPMENT FUNCTIONAL FORM GDP GDP DEFLATOR GINI COEFFICIENT GINI INDEX GROWTH COMPONENT GROWTH DETERMINANTS GROWTH EFFECT GROWTH LITERATURE GROWTH PRO-POOR GROWTH RATE GROWTH RATES GROWTH REGRESSION GROWTH REGRESSIONS HETEROSKEDASTICITY HIGH INCOME HIGH INCOME COUNTRIES HIGH INFLATION HIGHER VOLATILITY HOUSEHOLD SIZE HOUSEHOLD SURVEY DATA HOUSEHOLD SURVEYS INCOME INCOME DISTRIBUTION INCOME DISTRIBUTIONS INCOME GROWTH RATE INCOME INEQUALITY INCOME LEVEL INCOME LEVELS INCOME SHARE INCOME SHOCKS INCOME STUDY INCOMES INCREASE INEQUALITY INEQUALITY AVERSION INEQUALITY AVERSION PARAMETER INEQUALITY CHANGE INEQUALITY CHANGES INEQUALITY DECLINES INEQUALITY FALLS INEQUALITY INDEX INEQUALITY MEASURE INEQUALITY MEASURES INFLATION RATE INFLATION RATES INTERNATIONAL MONETARY FUND LABOUR MARKET LABOUR SUPPLY LIFE EXPECTANCY LIVING STANDARDS LOG INCOME LONG RUN LONG-TERM GROWTH LORENZ CURVE LOW INCOME LOW INCOME COUNTRIES LOW-INCOME COUNTRIES M2 MACROECONOMIC POLICIES MACROECONOMICS MEAN GROWTH MEAN INCOME MEAN INCOME GROWTH MEASURE OF INEQUALITY MEASURED INEQUALITY MEASUREMENT ERROR MICRO DATA MIDDLE INCOME MIDDLE INCOME COUNTRIES MIDDLE-INCOME COUNTRIES MONOPOLY NATIONAL ACCOUNTS NATIONAL INCOME 0 HYPOTHESIS OBSERVED CHANGE OBSERVED GROWTH OBSERVED GROWTH RATE OBSERVED INCREASE OBSERVED VALUE PANEL REGRESSIONS PER CAPITA INCOMES POLICY DISCUSSIONS POLICY RESEARCH POLICY VARIABLES POLITICAL INSTABILITY POLITICAL RIGHTS POOR PEOPLE POPULATION GROWTH POSITIVE EFFECT POVERTY DEBATE POVERTY ESTIMATES POVERTY GAP POVERTY MEASURES POVERTY REDUCTION POWER PARITY PRIVATE CONSUMPTION PROMOTING GROWTH PUBLIC SECTOR PURCHASING POWER PURCHASING POWER PARITY REDUCED INEQUALITY REGRESSION ANALYSIS RELATIVE IMPORTANCE RELATIVE INCOMES RICH PEOPLE RISING INCOME INEQUALITY RISING INEQUALITY SECTOR EMPLOYMENT SERIES DATA SIGNIFICANCE LEVEL SIGNIFICANT CORRELATION SIGNIFICANT DIFFERENCES SIGNIFICANT RELATIONSHIP SOCIAL WELFARE STANDARD DEVIATION STANDARD ERRORS TRADE OPENNESS VALUE ADDED VOLATILITY WEALTH
Online Access:	http://documents.worldbank.org/curated/en/2014/04/19431734/growth-inequality-social-welfare-cross-country-evidence http://hdl.handle.net/10986/18329

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Summary:	Social welfare functions that assign weights to individuals based on their income levels can be used to document the relative importance of growth and inequality changes for changes in social welfare. In a large panel of industrial and developing countries over the past 40 years, most of the cross-country and over-time variation in changes in social welfare is due to changes in average incomes. In contrast, the changes in inequality observed during this period are on average much smaller than changes in average incomes, are uncorrelated with changes in average incomes, and have contributed relatively little to changes in social welfare.

Growth, Inequality, and Social Welfare : Cross-Country Evidence

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