Skip to main content

Income Inequality and Social Well-Being

  • Chapter
  • First Online:

Abstract

That inequality matters is gaining ground in development affairs. Reducing income disparities across the population is on top of the agenda of many governments today. High inequality may imply a large concentration of people either at the top or at the bottom of the distribution, thereby hollowing out the middle-income group. This can create social tension in society that may result in political instability and social conflicts.

This is a preview of subscription content, log in via an institution.

Buying options

Chapter
USD   29.95
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
eBook
USD   84.99
Price excludes VAT (USA)
  • Available as EPUB and PDF
  • Read on any device
  • Instant download
  • Own it forever
Hardcover Book
USD   109.99
Price excludes VAT (USA)
  • Durable hardcover edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Learn about institutional subscriptions

Notes

  1. 1.

    Kakwani (2000) developed a decomposition method that explains changes in poverty in terms of growth and inequality effects.

  2. 2.

    Kakwani (1981, 1986) developed welfare measures that account for the income distribution of the population.

  3. 3.

    Using the idea of equivalent length of life, Silber (1983) developed an inequality measure in the distribution of number of years lived by individuals. This is an innovative approach, accounting for the distribution of length of life enjoyed by individuals in a society.

  4. 4.

    The Atlas is available on the site http://www.atlasbrasil.org.br/2013/

  5. 5.

    Deutsch et al. (2015) have used the questionnaire and data from the Afrobarometer survey to develop indicators for different dimensions of well-being.

  6. 6.

    See Kakwani (1993).

References

  • Alkire, S. (2007). Choosing dimensions: The capability approach and multidimensional poverty. In N. Kakwani & J. Silber (Eds.), The many dimensions of poverty. New York: Palgrave Macmillan.

    Google Scholar 

  • Atkinson, A. (1970). On the measurement of inequality. Journal of Economic Theory, 2(3), 244–263.

    Article  Google Scholar 

  • Atkinson, A. (2015). Inequality: What can be done? Cambridge, MA: Harvard University Press.

    Book  Google Scholar 

  • Bosmans, K. (2013). Consistent comparisons of attainment and shortfall inequality: A critical examination. Maastricht: Mimeo/Maastricht University.

    Google Scholar 

  • Bourguignon, F. (1981). Pareto superiority of Unegalitarian Equilibria in Stiglitz’ model of wealth distribution with convex saving function. Econometrica, 49(6), 1469–1475.

    Article  Google Scholar 

  • Bourguignon, F. (2015). The globalization of inequality. Princeton: Princeton University Press.

    Book  Google Scholar 

  • Dabla-Norris, E., Kolchhar, K., Suphaphiphat, N., Ricka, F., & Tsounta, E. (2015). Causes and consequences of income inequality: A global perspective. IMF staff discussion note. Washington, DC: International Monetary Fund.

    Google Scholar 

  • Dasgupta, P. (1990). Well-being and the extent of its realization in poor countries. Economic Journal, 100, 1–32.

    Article  Google Scholar 

  • Deaton, A., & Paxson, C. (2001). Mortality, income, and income inequality over time in Britain and the United States (NBER working papers 8534). Cambridge, MA: National Bureau of Economic Research, Inc.

    Book  Google Scholar 

  • Deutsch, J., Musahara, H., & Silber, J. (2015, October 8–9). On the measurement of multidimensional well-being in some countries in the Eastern and Southern Africa. Paper presented at the 10th anniversary PEGNet conference, Berlin.

    Google Scholar 

  • Drenowski, J. (1974). On measuring and planning quality of life. The Hague: Institute for Social Studies.

    Google Scholar 

  • Erreygers, G. (2009). Can a single indicator measure both attainment and shortfall inequality. Journal of Health Economics, 28(4), 885–893.

    Article  Google Scholar 

  • Hicks, J. (1979). Growth vs. Basic needs: Is there a trade-off? World Development, 7, 985–994.

    Article  Google Scholar 

  • Hicks, N., & Streeten, P. (1979). Indicators of development: The search for a basic needs yardstick. World Development, 7, 567–580.

    Article  Google Scholar 

  • International Labor Organization. (2012a). Statistical update on employment in the informal economy. Geneva: International Labor Organization.

    Google Scholar 

  • International Labor Organization. (2012b). Understanding deficits of productive employment and setting targets: A methodological guide. Geneva: International Labor Organization.

    Google Scholar 

  • International Labor Organization and World Trade Organization. (2009). Globalization and informal jobs in developing countries. Geneva: International Labor Organization and World Trade Organization.

    Google Scholar 

  • Janvry, A., Finan, F.,& Sadoulet, E. (2006). Evaluating Brazil’s Bolsa escola program: Impact on schooling and municipal roles. Berkeley: University of California at Berkeley. Available at http://are.berkeley.edu/~esadoulet/papers/BolsaEscolaReport6-6.pdf. Accessed 18 Sept 2015.

  • Kakwani, N. (1977). Measurement of tax progressivity: An international comparison. Economic Journal, 87, 71–80.

    Article  Google Scholar 

  • Kakwani, N. (1980). Income inequality and poverty: Methods of estimation and policy applications. New York: Oxford University Press.

    Google Scholar 

  • Kakwani, N. (1981). Welfare measures: An international comparison. Journal of Development Economics, 8, 21–45.

    Article  Google Scholar 

  • Kakwani, N. (1986). Analyzing redistribution policies: A study using Australian data. Cambridge: Cambridge University Press.

    Google Scholar 

  • Kakwani, N. (2000). On measuring growth and inequality components of poverty with application to Thailand. Journal of Quantitative Economics, 16(1), 67–80.

    Google Scholar 

  • Kakwani, N., & Son, H. (2015). Measuring food insecurity: Global estimates (ECINEQ working paper series no. 370). Milano: Society for the Study of Economic Inequality.

    Google Scholar 

  • Kakwani, N., & Subbarao, K. (1994). Global development: Is the gap widening or closing? In T. DeGregori & H. Rodgers (Eds.), Poverty policy in developing countries. London: JAI Press.

    Google Scholar 

  • Kaldor, N. (1955). Alternative theories of distribution. Review of Economic Studies, 23, 83–100.

    Article  Google Scholar 

  • Kmenta, J. (1990). Elements of econometrics. New York: Macmillan.

    Google Scholar 

  • Lambert, P., & Zheng, B. (2011). On the consistent measurement of achievement and shortfall inequality. Journal of Health Economics, 30(1), 214–219.

    Article  Google Scholar 

  • Lasso de la Vega, C., & Aristondo, O. (2012). Proposing indicators to measure achievement and shortfall inequality consistently. Journal of Health Economics, 31(4), 578–583.

    Article  Google Scholar 

  • Lazear, E. P., & Rosen, S. (1981). Rank-order tournaments as optimum labor contracts. Journal of Political Economy, 89(5), 841–864.

    Article  Google Scholar 

  • Mello, L., & Hoppe, M. (2005). Educational attainment in Brazil: The experience of FUNDEF (OECD economics department working papers no. 424). Paris: Organization for Economic Co-operation and Development.

    Book  Google Scholar 

  • Mirrlees, J. (1971). An exploration in the theory of optimum income taxation. Review of Economic Studies, 38(114), 175–208.

    Article  Google Scholar 

  • Morris, D. (1979). Measuring the conditions of the world poor: The physical quality of life index. New York: Pergamon Press.

    Google Scholar 

  • Oghuvbu, E. (2010). Attendance and academic performance of students in secondary schools: A correlational approach. Studies in Home and Community Science, 4(1), 21–25.

    Google Scholar 

  • Permanyer, I. (2015). Measuring achievement and shortfall improvements in a consistent way. Review of Income and Wealth. [online]. Available at DOI: 10.1111/roiw.12194. Accessed 1 Dec 2015.

    Google Scholar 

  • Ravallion, M. (1997). Can high inequality developing countries escape absolute poverty? Economics Letters, 56, 51–57.

    Article  Google Scholar 

  • Sen, A. (1973a). On the development of basic economic indicators to supplement GNP measures. United Nations Economic Bulletin for Asia and the Far East, 24. 1–11.

    Google Scholar 

  • Sen, A. (1974). Informational bases of alternative welfare approaches: Aggregation and income distribution. Journal of Public Economics, 3(4), 387–403.

    Article  Google Scholar 

  • Sen, A. (1984). The living standard. Oxford Economic Papers, 36, 74–90.

    Google Scholar 

  • Sen, A. (1985). Well-being, agency and freedom: The Dewey lectures 1984. The Journal of Philosophy, 82(4), 169–221.

    Google Scholar 

  • Sen, A. (1987). The standard of living. In G. Hawthorn (Ed.), The standard of living. Cambridge: Cambridge University Press.

    Chapter  Google Scholar 

  • Sen, A. (1989). Development as capability expansion. Journal of Development Planning, 19, 41–58.

    Google Scholar 

  • Sen, A. (1992). Inequality reexamined. Oxford: Clarendon Press.

    Google Scholar 

  • Sen, A. (1995). Rationality and social choice. American Economic Review, 85, 1–24.

    Google Scholar 

  • Sheehan, G., & Hopkins, M. (1979). Basic needs performance: An analysis of some international data. Geneva: International Labor Organization.

    Google Scholar 

  • Silber, J. (1983). ELL (The Equivalent Length of Life) or another attempt of measuring development. World Development, 11(1), 21–29.

    Article  Google Scholar 

  • Silva, J., Almeida, R., & Strokova, V. (2015). Sustaining employment and wage gains in Brazil: A skills and jobs agenda. Washington, DC: The World Bank.

    Book  Google Scholar 

  • Spain, D., & Bianchi, S. (1996). Women in the labor market. Focus, 20(1), 1–3.

    Google Scholar 

  • Stiglitz, J. (2012). The price of inequality. London: Penguin.

    Google Scholar 

  • Streeten, P. (1979). Basic needs: Premises and promises. Journal of Policy Modeling, 1, 136–146.

    Article  Google Scholar 

  • The Economist. (2015, July 4th–10th). Nutrition in India: Of secrecy and stunting, 416(8945), 24–25.

    Google Scholar 

  • Todaro, M., & Smith, S. (2003). Case studies in economic development (3rd ed.). George Washington University. Available at http://wps.aw.com/wps/media/objects/277/284582/todarocasestudies.pdf. Accessed 18 Sept 2015.

  • United Nations Development Programme. (1990). Human development report 1990. New York: Oxford University Press.

    Google Scholar 

  • United Nations Research Institute for Social Development. (1972). Contents and measurement of socio-economic development: A staff survey. New York: Praeger.

    Google Scholar 

  • World Bank. (2013). World development report 2013. Washington, DC: The World Bank.

    Google Scholar 

  • World Bank. (2015). The state of social safety nets 2015. Washington, DC: The World Bank.

    Book  Google Scholar 

  • Zepeda, E. (2006). Background research for Do CCTs reduce poverty?. One Pager #21. Brasili: International Poverty Centre.

    Google Scholar 

Download references

Author information

Authors and Affiliations

Authors

Appendix

Appendix

6.1.1 Regression Estimates

Table A6.1 Dependent variable = achievement in life expectancy at birth
Table A6.2 Dependent variable = achievement in infant survival rate
Table A6.3 Dependent variable = achievement in child survival rate
Table A6.4 Dependent variable = achievement in adult literacy rate among people ages 15 and above
Table A6.5 Dependent variable = achievement in expected years of schooling for 18 year-olds
Table A6.6 Dependent variable = achievement in percentage of population ages 18 and above who completed high school
Table A6.7 Dependent variable = achievement in percentage of population ages 25 and above who completed higher education
Table A6.8 Dependent variable = achievement in percentage of children ages 11–14 attending school
Table A6.9 Dependent variable = achievement in percentage of children ages 15–17 attending school
Table A6.10 Dependent variable = achievement in percentage of youth ages 18–24 attending school
Table A6.11 Dependent variable = achievement in percentage of population with access to piped water
Table A6.12 Dependent variable = achievement in percentage of population with access to sanitary toilet
Table A6.13 Dependent variable = achievement in percentage of population with access to garbage collection
Table A6.14 Dependent variable = achievement in percentage of population with access to electricity
Table A6.15 Dependent variable = achievement in percentage of population with access to adequate sanitation
Table A6.16 Dependent variable = achievement in employment rate among people ages 18 and above
Table A6.17 Dependent variable = achievement in employment rate with formal contracts among people ages 18 and above
Table A6.18 Dependent variable = achievement in productive employment rate among people ages 18 and above
Table A6.19 Dependent variable = achievement in labor force participation rate among people ages 18 and above

Copyright information

© 2016 The Editor(s) (if applicable) and The Author(s)

About this chapter

Cite this chapter

Kakwani, N., Son, H.H. (2016). Income Inequality and Social Well-Being. In: Social Welfare Functions and Development. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-137-58325-3_6

Download citation

  • DOI: https://doi.org/10.1057/978-1-137-58325-3_6

  • Published:

  • Publisher Name: Palgrave Macmillan, London

  • Print ISBN: 978-1-137-58324-6

  • Online ISBN: 978-1-137-58325-3

  • eBook Packages: Economics and FinanceEconomics and Finance (R0)

Publish with us

Policies and ethics