New Economics Papers
on Economics of Happiness
Issue of 2010‒06‒26
thirteen papers chosen by

  1. Global Governance and Human Development: Promoting Democratic Accountability and Institutional Experimentation By Arjun Jayadev
  2. Human Development in Europe By Kitty Stewart
  3. Human Development in Africa By Augustin Kwasi Fosu and Germano Mwabu
  4. Capitalism, the state, and the underlying drivers of human development By Michael Walton
  5. Human Development Trends since 1970: A Social Convergence Story By George Gray Molina and Mark Purser
  6. Human Development and Sustainability By Eric Neumayer
  7. Birth Satisfaction Units (BSU): Measuring Cross-National Differences in Human Well-Being By Lant Pritchett
  8. Human Development: Definitions, Critiques, and Related Concepts By Sabina Alkire
  9. What (if Anything) Do Satisfaction Scores Tell Us about the Intertemporal Change in Living Conditions By Christoph Wunder; Johannes Schwarze
  10. Impacts of the global crisis and policy responses on child well-being: a macro-micro simulation framework By Sami Bibi; John Cockburn; Luca Tiberti; Ismaël Fofana; UNICEF Innocenti Research Centre; UNICEF West and Central Africa Regional Office (WCARO)
  11. NCPCR Report on Children Affected by Civil Unrest Dantewada and Khammam By HAQ Centre for Child Rights HAQCRC
  12. Are Happiness and Productivity Lower among University Students with Newly-Divorced Parents? An Experimental Approach By Sgroi, Daniel; Proto, Eugenio; Oswald, Andrew J.
  13. Quantity-Quality and the One Child Policy: The Only-Child Disadvantage in School Enrollment in Rural China By Nancy Qian

  1. By: Arjun Jayadev (University of Massachusetts Boston)
    Abstract: This paper seeks to critically examine recent debates on global governance, albeit from a human development perspective. In doing so it identifies and describes two important principles for building institutions for the advancing of human development: what may be termed the imperative of democratic accountability (most closely associated with the work of Amartya Sen) and the imperative of institutional experimentation (which has been theorized most extensively by Roberto Unger). The paper discusses these two principles in light of some of the major challenges that can and do affect the international community as a whole. It reviews some of the decentralized forms of governance which are evolving as developing countries assert themselves in debates on institutional organization. It then focuses more extensively on the global financial crisis as a case study in the inadequacies of current global governance. Finally, it uses the two imperatives mentioned to review the lessons that the crisis has provided, before describing specific proposals to redesign systems of global economic governance. Chief among these are the reforms advocated by the Commission of Experts of the President of the United Nations General Assembly on Reforms of the International Monetary and Financial System.
    Keywords: Human Development, Economic Development, Inequality, Human Rights, Capabilities, Health, Governance
    JEL: O10 O15 O16 O19 O20
    Date: 2010–06
  2. By: Kitty Stewart (London School of Economics and Political Science)
    Abstract: This paper examines levels and trends in human development in the 27 European Union Member States and four of the EU’s nearest neighbours (Iceland, Switzerland, Norway and Turkey). Its starting point is the UNDP Human Development Index but the paper goes beyond the HDI in three main ways. First, drawing on the Human Poverty Index, it sets countries more exacting standards for the three core elements of human development – income, health and education – by looking at progress for the bottom as well as trends in average national achievement, and by defining that progress in relation to national rather than global standards. Second, the paper provides evidence about disparities in human development on these core measures by population sub-groups (gender, geography, social class, ethnic background and migrant status). Third, the paper brings in wider aspects of human development. The three core elements might be thought of as giving people capabilities, but their ability to convert these capabilities into functionings (to lead happy and fulfilling lives, to exercise autonomy, to be active in social and political affairs) will depend not just on their individual characteristics but on the shape of the societies in which they live. The paper therefore looks at overall income equality, agency and empowerment in politics and in employment, social trust and environmental sustainability.
    Keywords: Human Development, Europe, inequality, agency, empowerment
    JEL: I00 I30 Y80
    Date: 2010–06
  3. By: Augustin Kwasi Fosu and Germano Mwabu (World Institute for Development Economics Research, United Nations University; University of Nairobi, Kenya)
    Abstract: Human development (HD), a process designed to enhance human lives directly, is contrasted with economic development, which entails the expansion of material things intended to fulfill human needs. Human development empowers people to participate in the improvement of their own well-being. The paper looks at the record of HD in Africa over the period 1970-2005, using half-decadal data derived from United Nations sources and national statistical bureaus. It is found that over the period analyzed, the human development index improved in all African countries except in Zambia, where it declined, due to unfavorable terms of trade and to persistent health and governance problems, among challenges. Nonetheless, despite this progress, African countries continue to lag behind other regions of the world in HD. There has been little advance on the economic development front, where growth plummeted in most African countries, impoverishing nearly 50 per cent of the population. Towards the end of the 1990s, however, African economies began to recover due mainly to reforms in governance and distributive systems, and in mechanisms to protect people against downside risks, including disease pandemics, political instabilities, droughts and adverse terms of trade. The paper argues for a continuation of reforms in order to further improve economic and human development outcomes on the continent.
    Keywords: Human development, poverty, political and economic governance, Africa
    JEL: I30 I0 O10 F13 Y1
    Date: 2010–06
  4. By: Michael Walton (Harvard University and the Centre for Policy Research, New Delhi)
    Abstract: What are the underlying drivers of human development? This essay argues that long-term human development, in incomes, social conditions, security and so on, is fundamentally driven by capitalist dynamics and state functioning. The big issue is not state versus market, or growth versus equity, or dynamism versus security. It is the jointly determined functioning of both capitalism and the state. It is in particular a consequence of the extent to which both capitalist and state behaviour is oligarchic, extractive, exploitative and divisive as opposed to being inclusive, innovative, accountable, responsive and effective at mediating distributional conflict. This can be conceptualized, at a point of time, in terms of the nature of the political equilibrium, or, alternatively, the way in which social contracts work. This is a product of the historically shaped interaction between political and economic elites, and between these and various social groups. Specific policy designs of course matter, whether in terms of market-related policy, regulation, designs for social provisioning. But the ways in policy and institutional choices work, and indeed the choices societies make, is intimately linked to the nature and functioning of the underlying social contracts that in turn shape capitalist dynamics and state behaviour.
    Keywords: capitalism, growth, poverty, human development
    JEL: I00 O10 P10 P16
    Date: 2010–06
  5. By: George Gray Molina and Mark Purser (Niehaus Center for Globalization and Governance, Princeton University; Human Development Report Office, UNDP)
    Abstract: This paper uses a unique data set of the Human Development Index to describe long-run human development trends for 111 countries, from 1970 to 2005. The first part of the paper shows trends by region, period and index subcomponent. We find that 110 of the 111 countries show progress in their HDI levels over a 35-year period. HDI growth is fastest for low-HDI and middle-HDI countries in the pre-1990 period. The life-expectancy and education subcomponents grow faster than income. The assessment of HDI progress is sensitive to choice of measurement. The second part of the paper focuses on the differences between income and non-income determinants of human development. First, HDI growth converges, both absolutely and conditionally, when running HDI growth rates on initial levels of HD. Second, we find that the income and non-income components of HDI change have a near-zero correlation. Third, we look at determinants of the non-income components of the HDI. We find that income is not a significant determinant of HDI change once we include urbanization, fertility and female schooling. Fourth, we test the effects of institutions, geography and gender on HDI growth. We find that the most robust predictors of HDI growth are fertility and female schooling. We check this result using years of women’s suffrage as an instrument for changes in gender relations, and find that it is a significant predictor of HDI progress for the whole sample.
    Keywords: human development, education, health and demographic trends, cross-country comparisons, measurement and analysis of poverty
    JEL: O15 N30 O50 I32
    Date: 2010–06
  6. By: Eric Neumayer (London School of Economics and Political Science)
    Abstract: The literatures and debates on human development on the one hand and sustainability on the other share much in common. Human development is essentially what sustainability advocates want to sustain and without sustainability, human development is not true human development. Yet the two strands of research have largely been separate and this paper shows how they can learn from each other. I put forward a concrete proposal on how human development and its measurement in the form of the Human Development Index (HDI) can be linked with measures of both weak and strong sustainability. Weak sustainability is built on the assumption that different forms of capital are substitutable, whereas strong sustainability rejects the notion of substitutability for certain critical forms of natural capital. Empirical results over the period 1980 to 2006 show that many of the lowest performing countries on the HDI also face problems of weak unsustainability, as measured by genuine savings. Countries with high to very high HDI performance, on the other hand, typically appear to be strongly unsustainable, as measured by ecological footprints, mostly because of unsustainably large carbon dioxide emissions. Two of the biggest challenges facing mankind this century will be to break the link between high human development and strongly unsustainable damage to natural capital on the one hand, requiring a very significant and rapid decarbonisation of their economies, and assisting countries with very low human development to overcome weak unsustainability by raising their investment levels into all forms of capital on the other.
    Keywords: weak sustainability, strong sustainability, Human Development Index, genuine savings, ecological footprints, climate change
    JEL: Q01 Q2 Q3 Q4
    Date: 2010–06
  7. By: Lant Pritchett (Harvard Kennedy School)
    Abstract: While everyone agrees that GDP per capita is an inadequate measure of a country’s overall “development” it is difficult to specify what, if anything, should take its place as a useful single summary number (or even just ranking). The Human Development Index is a prominent alternative which moves towards the notion of a more comprehensive measure of human wellbeing, but suffers many limitations in the limits of the domains it covers (only adding mortality and education) and in how those domains are assessed (only averages). I propose that a useful conceptual device is to imagine that individuals were ranking the countries they were to be born into, not knowing what position in that country they would occupy (e.g. male or female, rich or poor). The result could be a cardinal ranking of country of birth satisfaction units, how strongly someone would prefer to be born into country X versus country Y. While this thought experiment obviously does not of itself resolve any of the key issues, it can provide a framework for reasoning about how people would produce such a ranking: the domains of well being they would assess as important and how they would assess the distribution of well-being in those domains (e.g. would they care about the average, levels of absolute deprivation, inequalities).
    Keywords: Human Development, Poverty, Vulnerability
    JEL: O15 D63 F22
    Date: 2010–06
  8. By: Sabina Alkire (Oxford Poverty and Human Development Initiative, Oxford Department of International Development, Queen Elizabeth House, University of Oxford)
    Abstract: The purpose of this background paper is: i) to synthesize the discussions regarding the concept of human development, so as to inform the 2010 Report’s definition, and ii) drawing on the extensive policy and academic literatures, to propose relationships between the concept of human development and four related concepts: the Millennium Development Goals, Human Rights, Human Security, and Happiness. Inequality, the duration of outcomes across time, and environmental sustainability are also prominent due to their fundamental importance.
    Keywords: human development, capability approach, Millennium Development Goals, human security, human rights, inequality, environment, happiness, process freedom
    JEL: D6 I3 O1 A13 B5 B2 F0
    Date: 2010–06
  9. By: Christoph Wunder; Johannes Schwarze
    Abstract: This paper looks at the information content of satisfaction scores. It is argued that the information content depends on the extent to which people adapt to living conditions in general. Using data from the German Socio-Economic Panel Study (SOEP), the estimation of a dynamic panel data model provides evidence that adaptation takes place within a relatively short window of time: changes in living conditions are, for the most part, absorbed by an adjustment of the adaptation level within one year. This leads to the conclusion that the information content of satisfaction scores accentuates recent changes in living conditions. Remote changes are not captured by the according survey questions, even if these changes have long-term impact on living conditions. The usefulness of satisfaction scores as an indicator of people’s living conditions is discussed.
    Keywords: adaptation, dynamic panel data model, subjective well-being, satisfaction
    JEL: C23 I31
    Date: 2010
  10. By: Sami Bibi; John Cockburn; Luca Tiberti; Ismaël Fofana; UNICEF Innocenti Research Centre; UNICEF West and Central Africa Regional Office (WCARO)
    Abstract: This paper outlines the methodology of a UNICEF research project on the impact of the global economic crisis on children in Western and Central Africa, which can also be applied to study the effects of other socio-economic shocks on households and, particularly on children in developing countries. To understand the nature and the extent of the effects of a crisis in developing countries requires a rigorous analysis of the transmission mechanisms at both the macro and micro levels. This paper provides a tool to attempt to predict ex ante the impacts of the crisis, and possible policy responses, on households and their children. As timely data monitoring child well-being are not readily available to guide the rapid implementation of policies to protect children, predictive model was developed that anticipates the impacts of the crisis on various essential dimensions of child wellbeing. Specifically, this paper proposes and discusses a combined macro-micro model following a top-down approach.
    Keywords: child education; child health; child labour; child poverty; econometric models; economic crisis; hunger; social protection;
    JEL: I32
    Date: 2010
  11. By: HAQ Centre for Child Rights HAQCRC
    Abstract: The National Commission for the Protection of Child Rights (NCPCR) conducted a factfinding visit from 17th to 19th December 2007, to Dantewada (Chhattisgarh) and Khammam (Andhra Pradesh), in order to assess the status of children’s health and education in the situation of civil unrest in Dantewada district. The following report details a narrative account of the team’s visit and highlights key issues pertaining to children and families in camps and villages affected by conflict in Dantewada and those displaced across state borders as a result of the same. Specific action items recommended by the NCPCR team in response to these issues have also been noted.
    Keywords: Dantewada, Chhattisgarh, Andhra Pradesh, Khammam, civil unrest, children, families, villages, displaced, protection, child rights, camps, training, development, child rights, schools, hostels, teachers, health services, hostels, eduation,
    Date: 2010
  12. By: Sgroi, Daniel (Department of Economics, University of Warwick); Proto, Eugenio (Department of Economics, University of Warwick); Oswald, Andrew J. (Department of Economics, University of Warwick and and Warwick Business School)
    Abstract: We live in a high-divorce age. Parents worry about the possibility of negative effects upon their children. This paper tests whether recent parental-divorce has deleterious consequences for grown children. Under controlled conditions, it measures students’ happiness with life, and their productivity in a standardized laboratory task. No negative effects from divorce can be detected. If anything, happiness and productivity are greater, particularly among males, if they have experienced parental divorce. Using longitudinal BHPS data -- to control for fixed effects -- we cross-check this result on happiness. Again, the evidence suggests that young people’s mental well-being improves after parental divorce.
    Keywords: Labor productivity ; divorce ; well-being ; happiness ; experimental economics JEL Codes: D03 ; J24 ; C91
    Date: 2010
  13. By: Nancy Qian
    Abstract: Many believe that increasing the quantity of children will lead to a decrease in their quality. This paper exploits plausibly exogenous changes in family size caused by relax- actions in China's One Child Policy to estimate the causal effect of family size on school enrollment of the …first child. The results show that for one-child families, an additional child signi…ficantly increased school enrollment of …first-born children by approximately 16 percentage-points. The effect is larger for households where the children are of the same sex, which is consistent with the existence of economies of scale in schooling costs.[Working Paper No. 228]
    Keywords: Education, Development, Family Planning
    Date: 2010

General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.