IDEAS home Printed from https://ideas.repec.org/a/eee/exehis/v72y2019icp57-73.html
   My bibliography  Save this article

Missed opportunities? Human welfare in Western Europe and the United States, 1913–1950

Author

Listed:
  • Gallardo-Albarrán, Daniel

Abstract

GDP suggests that the period 1913–1950 is one of missed opportunities for improving living standards in Europe. However, life in Europe during these years improved significantly, as citizens experienced dramatic declines in mortality, working time and inequality. To measure the contribution of these aspects to broader welfare, I apply a new theoretically-grounded indicator that, contrary to previous measures used in the literature, allows for a direct comparison with GDP across countries and time. I find that income underestimates welfare growth significantly (up to 2.2 percent annually) and that cross-country differences are larger and more persistent than other welfare measures imply. This article calls for a reappraisal of the evolution of living standards during the period 1913–1950 and, more generally, presents an application of a new indicator to measure multi-dimensional welfare in historical contexts.

Suggested Citation

  • Gallardo-Albarrán, Daniel, 2019. "Missed opportunities? Human welfare in Western Europe and the United States, 1913–1950," Explorations in Economic History, Elsevier, vol. 72(C), pages 57-73.
    • Handle: RePEc:eee:exehis:v:72:y:2019:i:c:p:57-73
    DOI: 10.1016/j.eeh.2018.11.004
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0014498317301973
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.eeh.2018.11.004?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Dora L. Costa & Matthew E. Kahn, 2004. "Changes in the Value of Life, 1940--1980," Journal of Risk and Uncertainty, Springer, vol. 29(2), pages 159-180, September.
    2. Robert C. Feenstra & Robert Inklaar & Marcel P. Timmer, 2015. "The Next Generation of the Penn World Table," American Economic Review, American Economic Association, vol. 105(10), pages 3150-3182, October.
    3. William D. Nordhaus & James Tobin, 1973. "Is Growth Obsolete?," NBER Chapters, in: The Measurement of Economic and Social Performance, pages 509-564, National Bureau of Economic Research, Inc.
    4. Raj Chetty, 2006. "A New Method of Estimating Risk Aversion," American Economic Review, American Economic Association, vol. 96(5), pages 1821-1834, December.
    5. Peter H. Lindert & Jeffrey G. Williamson, 2003. "Does Globalization Make the World More Unequal?," NBER Chapters, in: Globalization in Historical Perspective, pages 227-276, National Bureau of Economic Research, Inc.
    6. Fishback, Price V., 1992. "Soft Coal, Hard Choices: The Economic Welfare of Bituminous Coal Miners, 1890-1930," OUP Catalogue, Oxford University Press, number 9780195067255.
    7. Jutta Bolt & Jan Luiten Zanden, 2014. "The Maddison Project: collaborative research on historical national accounts," Economic History Review, Economic History Society, vol. 67(3), pages 627-651, August.
    8. Peter H. Lindert & Jeffrey G. Williamson, 2016. "Unequal Gains: American Growth and Inequality since 1700," Economics Books, Princeton University Press, edition 1, number 10670.
    9. repec:dgr:rugggd:199409 is not listed on IDEAS
    10. Inklaar, Robert & de Jong, Harmen & Bolt, Jutta & van Zanden, Jan, 2018. "Rebasing 'Maddison': new income comparisons and the shape of long-run economic development," GGDC Research Memorandum GD-174, Groningen Growth and Development Centre, University of Groningen.
    11. Leandro Prados de la Escosura, 2015. "World Human Development: 1870–2007," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 61(2), pages 220-247, June.
    12. Viscusi, W Kip & Aldy, Joseph E, 2003. "The Value of a Statistical Life: A Critical Review of Market Estimates throughout the World," Journal of Risk and Uncertainty, Springer, vol. 27(1), pages 5-76, August.
    13. Broadberry,Stephen & O'Rourke,Kevin H., 2010. "The Cambridge Economic History of Modern Europe," Cambridge Books, Cambridge University Press, number 9780521708395, January.
    14. David Cutler & Angus Deaton & Adriana Lleras-Muney, 2006. "The Determinants of Mortality," Journal of Economic Perspectives, American Economic Association, vol. 20(3), pages 97-120, Summer.
    15. Gary S. Becker & Tomas J. Philipson & Rodrigo R. Soares, 2005. "The Quantity and Quality of Life and the Evolution of World Inequality," American Economic Review, American Economic Association, vol. 95(1), pages 277-291, March.
    16. Prados de la Escosura, Leandro, 2000. "International Comparisons of Real Product, 1820-1990: An Alternative Data Set," Explorations in Economic History, Elsevier, vol. 37(1), pages 1-41, January.
    17. Dora L. Costa, 2015. "Health and the Economy in the United States from 1750 to the Present," Journal of Economic Literature, American Economic Association, vol. 53(3), pages 503-570, September.
    18. Michael D. Bordo & Alan M. Taylor & Jeffrey G. Williamson, 2003. "Globalization in Historical Perspective," NBER Books, National Bureau of Economic Research, Inc, number bord03-1, June.
    19. Seema Jayachandran & Adriana Lleras-Muney & Kimberly V. Smith, 2010. "Modern Medicine and the Twentieth Century Decline in Mortality: Evidence on the Impact of Sulfa Drugs," American Economic Journal: Applied Economics, American Economic Association, vol. 2(2), pages 118-146, April.
    20. James C. Riley, 2005. "Estimates of Regional and Global Life Expectancy, 1800–2001," Population and Development Review, The Population Council, Inc., vol. 31(3), pages 537-543, September.
    21. Huberman, Michael & Minns, Chris, 2007. "The times they are not changin': Days and hours of work in Old and New Worlds, 1870-2000," Explorations in Economic History, Elsevier, vol. 44(4), pages 538-567, October.
    22. Nestor Gandelman & Ruben Hernandez-Murillo, 2015. "Risk Aversion at the Country Level," Review, Federal Reserve Bank of St. Louis, vol. 97(1), pages 53-66.
    23. Antonin Bergeaud & Gilbert Cette & Rémy Lecat, 2016. "Productivity Trends in Advanced Countries between 1890 and 2012," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 62(3), pages 420-444, September.
    24. repec:hal:pseose:halshs-00847231 is not listed on IDEAS
    25. David Cutler & Grant Miller, 2005. "The role of public health improvements in health advances: The twentieth-century United States," Demography, Springer;Population Association of America (PAA), vol. 42(1), pages 1-22, February.
    26. Jan Luiten Zanden & Joerg Baten & Peter Foldvari & Bas Leeuwen, 2014. "The Changing Shape of Global Inequality 1820–2000; Exploring a New Dataset," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 60(2), pages 279-297, June.
    27. Atkinson, Anthony B., 1970. "On the measurement of inequality," Journal of Economic Theory, Elsevier, vol. 2(3), pages 244-263, September.
    28. Williamson, Jeffrey G., 1996. "Globalization, Convergence, and History," The Journal of Economic History, Cambridge University Press, vol. 56(2), pages 277-306, June.
    29. Kevin M. Murphy & Robert H. Topel, 2006. "The Value of Health and Longevity," Journal of Political Economy, University of Chicago Press, vol. 114(5), pages 871-904, October.
    30. Branko Milanovic, 2006. "Economic Integration and Income Convergence: Not Such a Strong Link?," The Review of Economics and Statistics, MIT Press, vol. 88(4), pages 659-670, November.
    31. Kerry Hickson, 2014. "The GDP Value of Twentieth-Century Health Improvements in Developed Economies: Initial Estimates for England," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 60(2), pages 385-399, June.
    32. Crafts, N. F. R., 1997. "The Human Development Index and changes in standards of living: Some historical comparisons," European Review of Economic History, Cambridge University Press, vol. 1(3), pages 299-322, December.
    33. Milton Moss, 1973. "The Measurement of Economic and Social Performance," NBER Books, National Bureau of Economic Research, Inc, number moss73-1, June.
    34. Facundo Alvaredo & Anthony Atkinson & Thomas Piketty & Emmanuel Saez, 2013. "The Top 1% in International and Historical Perspective," Post-Print halshs-00847231, HAL.
    35. Dora Costa & Richard H. Steckel, 1997. "Long-Term Trends in Health, Welfare, and Economic Growth in the United States," NBER Chapters, in: Health and Welfare during Industrialization, pages 47-90, National Bureau of Economic Research, Inc.
    36. Maddison, Angus, 1994. "Standardised Estimates of Fixed Capital Stock: A Six Country Comparison," GGDC Research Memorandum 199409, Groningen Growth and Development Centre, University of Groningen.
    37. Córdoba, Juan Carlos & Verdier, Geneviève, 2008. "Inequality and growth: Some welfare calculations," Journal of Economic Dynamics and Control, Elsevier, vol. 32(6), pages 1812-1829, June.
    38. Charles I. Jones & Peter J. Klenow, 2016. "Beyond GDP? Welfare across Countries and Time," American Economic Review, American Economic Association, vol. 106(9), pages 2426-2457, September.
    39. Dan Usher, 1973. "The Measurement of Economic Growth," Working Paper 145, Economics Department, Queen's University.
    40. Crafts, Nicholas & Gazeley, Ian & Newell, Andrew (ed.), 2007. "Work and Pay in 20th Century Britain," OUP Catalogue, Oxford University Press, number 9780199212668.
    41. Lindert, Peter H. & Williamson, Jeffrey G., 1985. "Growth, equality, and history," Explorations in Economic History, Elsevier, vol. 22(4), pages 341-377, October.
    42. Bergeaud, A. & Cette, G. & Lecat, R., 2015. "Productivity trends from 1890 to 2012 in advanced countries," Rue de la Banque, Banque de France, issue 07, June..
    43. Hatton, Timothy J. & Williamson, Jeffrey G., 1998. "The Age of Mass Migration: Causes and Economic Impact," OUP Catalogue, Oxford University Press, number 9780195116519.
    44. Kim, Seung-Wook & Fishback, Price V., 1993. "Institutional Change, Compensating Differentials, and Accident Risk in American Railroding, 1892–1945," The Journal of Economic History, Cambridge University Press, vol. 53(4), pages 796-823, December.
    45. Crafts, Nicholas, 2002. "The Human Development Index, 1870–1999: Some revised estimates," European Review of Economic History, Cambridge University Press, vol. 6(3), pages 395-405, December.
    46. Facundo Alvaredo & Anthony B. Atkinson & Thomas Piketty & Emmanuel Saez, 2013. "The Top 1 Percent in International and Historical Perspective," Journal of Economic Perspectives, American Economic Association, vol. 27(3), pages 3-20, Summer.
    47. Williamson, Jeffrey G., 1982. "Was the industrial revolution worth it? Disamenities and death in 19th century British towns," Explorations in Economic History, Elsevier, vol. 19(3), pages 221-245, July.
    48. repec:reg:rpubli:282 is not listed on IDEAS
    49. Dan Usher, 1973. "An Imputation to the Measure of Economic Growth for Changes in Life Expectancy," NBER Chapters, in: The Measurement of Economic and Social Performance, pages 193-232, National Bureau of Economic Research, Inc.
    50. Robert J. Barro & Jose F. Ursua, 2008. "Macroeconomic Crises since 1870," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 39(1 (Spring), pages 255-350.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Daniel Gallardo Albarr‡n, 2017. "Missed opportunities? The development of human welfare in Western Europe, 1913-1950," Working Papers 0114, European Historical Economics Society (EHES).
    2. Gallardo-Albarrán, Daniel, 2018. "Health and economic development since 1900," Economics & Human Biology, Elsevier, vol. 31(C), pages 228-237.
    3. Gregory Ponthiere, 2007. "Monetizing Longevity Gains under Welfare Interdependencies: An Exploratory Study," Journal of Family and Economic Issues, Springer, vol. 28(3), pages 449-469, September.
    4. Weil, David N., 2014. "Health and Economic Growth," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 2, chapter 3, pages 623-682, Elsevier.
    5. Leandro Prados de la Escosura, 2023. "Inequality Beyond GDP: A Long View," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 69(3), pages 533-554, September.
    6. Gregory Ponthiere, 2016. "The contribution of improved joint survival conditions to living standards: an equivalent consumption approach," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 46(2), pages 407-449, February.
    7. Cordoba, Juan Carlos & Ripoll, Marla, 2012. "Life, Death and World Inequality," Staff General Research Papers Archive 34945, Iowa State University, Department of Economics.
    8. Daniel Gallardo-Albarrán, 2024. "Capital, Productivity, and Human Welfare Since 1870," Springer Books, in: Claude Diebolt & Michael Haupert (ed.), Handbook of Cliometrics, edition 3, pages 2023-2048, Springer.
    9. Emanuele Felice, 2012. "Neither dashboard nor 'mashup' indices: an empirical wealth approach as a pathway to a comprehensive measure of development," UHE Working papers 2012_01, Universitat Autònoma de Barcelona, Departament d'Economia i Història Econòmica, Unitat d'Història Econòmica.
    10. Juliana Jaramillo-Echeverri & Adolfo Meisel-Roca & María Teresa Ramírez-Giraldo, 2019. "More than 100 years of improvements in living standards: the case of Colombia," Cliometrica, Springer;Cliometric Society (Association Francaise de Cliométrie), vol. 13(3), pages 323-366, September.
    11. Andrea Brandolini & Giovanni Vecchi, 2011. "The Well-Being of Italians: A Comparative Historical Approach," Quaderni di storia economica (Economic History Working Papers) 19, Bank of Italy, Economic Research and International Relations Area.
    12. Ryan Edwards, 2013. "The cost of uncertain life span," Journal of Population Economics, Springer;European Society for Population Economics, vol. 26(4), pages 1485-1522, October.
    13. W. Walker Hanlon, 2015. "Pollution and Mortality in the 19th Century," NBER Working Papers 21647, National Bureau of Economic Research, Inc.
    14. Leandro Prados de la Escosura, 2015. "World Human Development: 1870–2007," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 61(2), pages 220-247, June.
    15. Husain, Muhammad Jami, 2010. "Contribution of health to economic development: A survey and overview," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 4, pages 1-52.
    16. Emanuele Felice, 2016. "The Misty Grail: The Search for a Comprehensive Measure of Development and the Reasons for GDP Primacy," Development and Change, International Institute of Social Studies, vol. 47(5), pages 967-994, September.
    17. Nicola Amendola & Giacomo Gabbuti & Giovanni Vecchi, 2023. "On some problems of using the Human Development Index in economic history," European Review of Economic History, European Historical Economics Society, vol. 27(4), pages 477-505.
    18. Juliana Jaramillo-Echeverri & Adolfo Meisel-Roca & María Teresa Ramírez-Giraldo, 2017. "More than One Hundred Years of Improvements in Living Standards: the Case of Colombia," Borradores de Economia 1027, Banco de la Republica de Colombia.
    19. Shaun M. Da Costa, 2020. "The impact of the Ebola crisis on mortality and welfare in Liberia," Health Economics, John Wiley & Sons, Ltd., vol. 29(12), pages 1517-1532, December.
    20. Prados de la Escosura, Leandro, 2018. "Well-being Inequality in the Long Run," CEPR Discussion Papers 12920, C.E.P.R. Discussion Papers.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:exehis:v:72:y:2019:i:c:p:57-73. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/622830 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.