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Well‐being during the Great Recession: new evidence from a measure of multi‐dimensional living standards with heterogeneous preferences

Author

Listed:
  • Romina Boarini

    (OCDE - Organisation de Coopération et de Développement Economiques = Organisation for Economic Co-operation and Development)

  • Marc Fleurbaey

    (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

  • Fabrice Murtin

    (OCDE - Organisation de Coopération et de Développement Economiques = Organisation for Economic Co-operation and Development)

  • Paul Schreyer

    (OCDE - Organisation de Coopération et de Développement Economiques = Organisation for Economic Co-operation and Development)

Abstract

We develop a distribution-adjusted welfare measure that aggregates income, unemployment, and longevity using individual weights that reflect heterogeneous preferences. The measure is implemented for 28 OECD countries for 2008–2013 to gauge the welfare effects of the Great Recession. Estimated shadow prices of one percentage point of unemployment and one year of longevity average 3.1 percent and 5.7 percent of household income, respectively. We find that the rate of GDP growth poorly reflects the social cost of the Great Recession. On average, GDP per capita stagnated across OECD countries between 2008 and 2013 while living standards of poor households fell by 5.3 percent annually.

Suggested Citation

  • Romina Boarini & Marc Fleurbaey & Fabrice Murtin & Paul Schreyer, 2022. "Well‐being during the Great Recession: new evidence from a measure of multi‐dimensional living standards with heterogeneous preferences," PSE-Ecole d'économie de Paris (Postprint) halshs-03907676, HAL.
    • Handle: RePEc:hal:pseptp:halshs-03907676
    DOI: 10.1111/sjoe.12461
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-03907676
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    1. Peter Benczur & Virmantas Kvedaras & Nadir Preziosi, 2023. "Health-adjusted income: complementing GDP to reflect the valuation of life expectancy," JRC Research Reports JRC134152, Joint Research Centre.

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    Keywords

    Beyond GDP; Measurement; Shadow prices; Value of statistical life; Welfare; Well-being; Living standards; Indicator;
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