Proposal preview

The Development of Wellbeing in History: Metrics and Mechanisms

At the heart of economic history is the question how human wellbeing has evolved throughout time. There is no simple answer. In fact, before being able to address this question and actually measure wellbeing, it has to be clear what wellbeing exactly entails. In other words, what aspects of welfare should be measured? And what statistical indicators are most suitable for studying those aspects of welfare?

The literature has not reached a consensus on any of these questions yet. Researchers have long since relied on GDP as a comprehensive welfare measure (Oulton, 2012), but this indicator is being increasingly criticized. Although the concept has proven useful, GDP per capita does not fully capture crucial aspects of wellbeing such as health, political freedom or inequality (Deaton, 2013). Going ‘beyond GDP’ by incorporating these elements can have important implications for our understanding of the past, especially in periods in which the development of GDP deviates from that of other welfare dimensions. This session aims at presenting the latest additions to this debate and their consequences for economic history.

To account for the multi-dimensional character of wellbeing, various alternative strategies have been proposed, ranging from the dashboard approach advocated in the Stiglitz, Sen and Fitoussi (2009) report to composite indicators such as the Human Development Index (UNDP, 1990). In this session, we invite paper proposals on all topics related to the ‘beyond GDP’ measurement of wellbeing, but a special interest goes out to work on composite indicators.

If wellbeing is studied using a composite indicator, there is a range of methodologies that can be applied to collapse various welfare dimensions in one measure, each of them with particular strengths and weaknesses. For instance, the HDI – which combines key aspects of people’s life such as income, education and health – is nowadays seen as problematic and raises important questions. Why are only these three dimensions included? Are they interconnected? What is their relative importance in the final indicator? There is a lack of strong theoretical basis and, consequently, the HDI and other composite measures that assign equal weights to the underlying components have been referred to as ‘mashup indices’ (Ravallion 2012).

Several promising research avenues have recently been explored to tackle the weighting problem. One employs statistical methods to aggregate the various dimensions of wellbeing such that the ensuing composite indicator results from a full and efficient use of the information contained in the underlying dimensions. An example of this strategy is Rijpma’s (2014) composite indicator of historical wellbeing based on the various social dimensions studied in the OECD’s How was Life?-project. Yet there are also drawbacks to this approach, among which the concern that the weighing process does not follow from economic theory.

This concern is partly addressed in the work of Prados de la Escosura (2016), who suggests an economic rationale to validate the collapse of several dimensions of economic liberty in a composite index of economic freedom. A more explicit link with economic theory can be found in the strand of literature that uses utility frameworks to combine different welfare aspects. Examples are the works of Williamson (1983) on Britain and that of Becker et al. (2005), Fleurbaey and Gaulier (2009) and Jones and Klenow (2016) on a broader set of countries.

Despite recent advances in this field, little is known about the implications of new composite measures of wellbeing for our understanding of and narratives in economic history. More research is needed and hence we invite papers on related topics.

Questions regarding the session can be directed to Daniel Gallardo Albarrán (e-mail: d.gallardo.albarran@rug.nl).

Organizer(s)

  • Leandro Prados de la Escosura Carlos III University of Madrid leandro.prados.delaescosura@uc3m.es
  • Daniel Gallardo-Albarrán University of Groningen d.gallardo.albarran@rug.nl
  • Anne EC McCants MIT amccants@mit.edu

Session members

  • Daniel Gallardo-Albarrán, University of Groningen
  • Anne McCants, MIT
  • Jan Luiten van Zanden, Utrecht University
  • Michaelis Moatsos, Utrecht University
  • Auke Rijpma, Utrecht University
  • Dan Seligson,
  • Ramon Ramon-Muñoz, University of Barcelona
  • Josep-Maria Ramon-Muñoz, University of Murcia
  • Joerg Baten, University of Tuebingen
  • Richard H. Steckel, Ohio State University
  • Clark Spencer Larsen, Ohio State University
  • Charlotte A. Roberts, Durham University
  • Francisco Manuel Parejo-Moruno, University of Extremadura
  • Antonio Miguel Linares-Lujan, University of Extremadura
  • Bernard Harris, University of Strathclyde
  • María José Fuentes Vásquez, University of Barcelona
  • Johan Fourie, Stellenbosch University
  • Robert Ross, Leiden University
  • Jessica Vechbanyongratana, Chulalongkorn University
  • Thanyaporn Chankrajang, Chulalongkorn University
  • Simone Wegge, College of Staten Island - CUNY
  • Cormac Ó Gráda, University College Dublin
  • Tyler Anbinder, George Washington University
  • Giovanni Vecchi, Tor Vergata University
  • Giacomo Gabutti, Oxford University
  • Nicola Amendola, Tor Vergata University

Discussant(s)

  • David Weil Brown University David_Weil@brown.edu
  • Herman de Jong University of Groningen h.j.de.jong@rug.nl
  • Peter Perdue Yale University peter.c.perdue@yale.edu
  • Brooks Kaiser University of Southern Denmark baka@sam.sdu.dk

Papers

Panel abstract

At the heart of economic history is the question how human wellbeing has evolved throughout time. There is no simple answer. In fact, before being able to address this question and actually measure wellbeing, it has to be clear what wellbeing entails. In other words, what aspects of welfare should be measured? And what statistical indicators are most suitable for studying those aspects of welfare? Besides dealing with these questions, this session also looks at the macro- and micro-level mechanisms that are conducive to wellbeing (or lack thereof) in different historical and geographical settings. For instance, the papers in this panel will consider regional developments in educational systems, the implications of different marriage patterns or the use of the legal system by individuals to preserve their livelihoods. The session ends with a round table in which four prominent speakers from different fields reflect on the main themes of the session.

1st half

Delinking economic growth and increases in wellbeing, 1820– 2000

Auke Rijpma, Jan Luiten van Zanden, and Michalis Moatsos

In the OECD How was Life? report we studied economic growth and the various dimensions of well-being for the world between 1820 and 2010. However, the link between economic growth and wellbeing is changing over time. In the 19th century industrialization did not increase wellbeing (the ‘early growth paradox’), whereas in the second half of the 20th century increases of wellbeing outpaced GDP growth, resulting in a ‘delinking’ between the two. This is demonstrated in the relationship between life expectancy and GDP per capita: the ‘Preston curve’ moves up due to independent changes in health care. In the paper we analyse these developments over the period 1820–2000 and ask the question what explains this ‘delinking’ between wellbeing and GDP growth, in which dimensions of wellbeing this occurs and where in the world this is most evident. Moreover, we discuss the possibility sustained increases in wellbeing without continued economic growth.

In the OECD How was Life? report we studied economic growth and the various dimensions of well-being for the world between 1820 and 2010. However, the link between economic growth and wellbeing is changing over time. In the 19th century industrialization did not increase wellbeing (the ‘early growth paradox’), whereas in the second half of the 20th century increases of wellbeing outpaced GDP growth, resulting in a ‘delinking’ between the two. This is demonstrated in the relationship between life expectancy and GDP per capita: the ‘Preston curve’ moves up due to independent changes in health care. In the paper we analyse these developments over the period 1820–2000 and ask the question what explains this ‘delinking’ between wellbeing and GDP growth, in which dimensions of wellbeing this occurs and where in the world this is most evident. Moreover, we discuss the possibility sustained increases in wellbeing without continued economic growth.

Human welfare since 1870 A global Approach

Daniel Gallardo-Albarrán

Cross-country differences in income per capita have increased uninterruptedly since 1870, thus suggesting that living standards have diverged since then. However, if we take a broader perspective on human welfare by considering health, we observe the opposite trend because between-country inequality in terms of life expectancy has greatly declined over the course of the 20th century. In this article, I apply a new welfare indicator grounded in economic theory to quantify (i) improvements in human welfare since 1870 and (ii) whether differences in living standards across countries have increased or decreased over time. This indicator uses economic theory and empirical evidence to tackle the aggregation issues associated with other measures of well-being such as the Human Development Index (HDI). By applying this theoretically grounded welfare measure to a global sample since 1870, I provide a new perspective on global development paths beyond existing analyses employing income measures or the HDI.

Cross-country differences in income per capita have increased uninterruptedly since 1870, thus suggesting that living standards have diverged since then. However, if we take a broader perspective on human welfare by considering health, we observe the opposite trend because between-country inequality in terms of life expectancy has greatly declined over the course of the 20th century. In this article, I apply a new welfare indicator grounded in economic theory to quantify (i) improvements in human welfare since 1870 and (ii) whether differences in living standards across countries have increased or decreased over time. This indicator uses economic theory and empirical evidence to tackle the aggregation issues associated with other measures of well-being such as the Human Development Index (HDI). By applying this theoretically grounded welfare measure to a global sample since 1870, I provide a new perspective on global development paths beyond existing analyses employing income measures or the HDI.

On the use of composite indices in economic history. Lessons from Italy, 1861-2016

Nicola Amendola, Giacomo Gabbuti and Giovanni Vecchi

We argue against the use of composite indices, such as the Human Development Index, in economic history. We show that composite indices can be interpreted as paternalistic social welfare functions (SWF), and therefore are nothing more than a formal representation of the analyst’s ethical system (preferences over collective outcomes). This contrasts with the use economic historians typically make of composite indices, as tools to lend objectivity to the measurement of multidimensional phenomena (letting multidimensional data “speak for themselves”). We support our claim by introducing a new constant-elasticity-of-substitution-based SWF family, referred to as CES-HDI, which encompasses all composite indices put forth by the literature. The CES-HDI brings to light the ethical judgments embedded in the definition of any composite index, and identifies the analyst’s implicit preferences by means of standard tools, e.g. marginal rates of substitution and elasticity of substitution parameters. Such a theoretical framework is illustrated by an empirical investigation...

We argue against the use of composite indices, such as the Human Development Index, in economic history. We show that composite indices can be interpreted as paternalistic social welfare functions (SWF), and therefore are nothing more than a formal representation of the analyst’s ethical system (preferences over collective outcomes). This contrasts with the use economic historians typically make of composite indices, as tools to lend objectivity to the measurement of multidimensional phenomena (letting multidimensional data “speak for themselves”). We support our claim by introducing a new constant-elasticity-of-substitution-based SWF family, referred to as CES-HDI, which encompasses all composite indices put forth by the literature. The CES-HDI brings to light the ethical judgments embedded in the definition of any composite index, and identifies the analyst’s implicit preferences by means of standard tools, e.g. marginal rates of substitution and elasticity of substitution parameters. Such a theoretical framework is illustrated by an empirical investigation of the long-run evolution of Italians’ living standards (1861-2016). We show how any history based on composite indices is one where both data and history play a minor role, if any.

Measuring Social Entropy and Finding True North

Anne McCants and Dan Seligson

A central quest of economic history is to explain why the haves have and the have-nots haven't. Inspired by Douglass North’s work on the co-evolution of institutions and wealth, much contemporary scholarship reduces to a treatment of institutions as cause, and of income as effect. But a co-evolution implies that, like chicken and egg, neither is the cause of the other. In broad terms, the haves live long and prosper beneath an umbrella of good governance, of political order. Measures of the life well-lived and the state well-governed may be combined, in the negative, to form a single measure of social entropy, that is of political, economic, and social disorder. We take the first principal component of the UNHDI and the World Bank’s Worldwide Governance Indicators as our metric and propose that social entropy is true North, the objective function of economic history’s quest.

A central quest of economic history is to explain why the haves have and the have-nots haven't. Inspired by Douglass North’s work on the co-evolution of institutions and wealth, much contemporary scholarship reduces to a treatment of institutions as cause, and of income as effect. But a co-evolution implies that, like chicken and egg, neither is the cause of the other. In broad terms, the haves live long and prosper beneath an umbrella of good governance, of political order. Measures of the life well-lived and the state well-governed may be combined, in the negative, to form a single measure of social entropy, that is of political, economic, and social disorder. We take the first principal component of the UNHDI and the World Bank’s Worldwide Governance Indicators as our metric and propose that social entropy is true North, the objective function of economic history’s quest.

Summary indicators of European Health, Work, and Violence over the Past Two Millennia

Joerg Baten, Richard H. Steckel, Clark Spencer Larsen and Charlotte A. Roberts

Using human skeletal remains, a joint large-scale project of economic historians, physical anthropologists and bioarchaeologists traces health, workload and violence in the European population since 300 CE. This study summarizes the main findings: Health was surprisingly good for people who lived during the early medieval period. The Justinian plague of the sixth century was beneficial for health of the smaller population that lived thereafter: it had relatively more resources that contributed to better living conditions. Increasing population density and inequality in the following centuries imposed an unhealthy diet – poor in protein – on the European population. In the late middle ages, a further health decline ensued, which was not reversed until the nineteenth century. While some aspects of health declined, other attributes improved: Interpersonal violence declined possibly because stronger states and institutions were able to enforce compromise and cooperation. European health over the past two millennia was hence multifaceted...

Using human skeletal remains, a joint large-scale project of economic historians, physical anthropologists and bioarchaeologists traces health, workload and violence in the European population since 300 CE. This study summarizes the main findings: Health was surprisingly good for people who lived during the early medieval period. The Justinian plague of the sixth century was beneficial for health of the smaller population that lived thereafter: it had relatively more resources that contributed to better living conditions. Increasing population density and inequality in the following centuries imposed an unhealthy diet – poor in protein – on the European population. In the late middle ages, a further health decline ensued, which was not reversed until the nineteenth century. While some aspects of health declined, other attributes improved: Interpersonal violence declined possibly because stronger states and institutions were able to enforce compromise and cooperation. European health over the past two millennia was hence multifaceted in nature.

The urban-rural height gap in late nineteenth-century Catalonia

Ramon Ramon-Muñoz and Josep-Maria Ramon-Muñoz

This paper aims to explore whether and to what extent there was a gap in biological living standards between rural and urban areas. It focuses on the north-eastern Iberian region of Catalonia by making use of a new and large dataset (more than 16,000 observations) based on military records for the cohort of males born in the year 1890 and enlisted in the year 1911. By combining individual heights with information at municipal level, we conclude that the 1890 cohort of conscripts living in rural areas were shorter than those that resided in towns and cities with more than 20,000 people. These latter were in fact the tallest in late nineteenth-century Catalonia, which suggests the existence of an urban premium in late nineteenth- century Catalonia.

This paper aims to explore whether and to what extent there was a gap in biological living standards between rural and urban areas. It focuses on the north-eastern Iberian region of Catalonia by making use of a new and large dataset (more than 16,000 observations) based on military records for the cohort of males born in the year 1890 and enlisted in the year 1911. By combining individual heights with information at municipal level, we conclude that the 1890 cohort of conscripts living in rural areas were shorter than those that resided in towns and cities with more than 20,000 people. These latter were in fact the tallest in late nineteenth-century Catalonia, which suggests the existence of an urban premium in late nineteenth- century Catalonia.

Building a Composite Index of Wellbeing for the South of the Southern Europe through Military Sources -- Extremadura (Spain), 1880-1980

Francisco M. Parejo-Moruno and Antonio M. Linares-Luján

By starting from the Physical Index of Quality of Life (PQLI), our communication aims to offer an alternative composite index of wellbeing from the data collected in the military recruitment sources. More specifically, this research combines in a dynamic indicator, calculated on the basis of the young men recruited in Extremadura (Spain) between 1901 and 2001, born between 1880 and 1980, three variables: height, life expectation and literacy. These variables come from the anthropometric and demographic information that the so-called Actas de Reclutamiento (Conscription Proceedings) provide in Spain. With the combination of these three variables and following the path of the works made by Costa and Steckel for the United States, Floud and Harris for Great Britain, Sandberg and Steckel for Sweden, Twarog for Germany or Crafts for Western Europe, we intend to know the historical evolution of wellbeing in one of the least developed region in Europe.

By starting from the Physical Index of Quality of Life (PQLI), our communication aims to offer an alternative composite index of wellbeing from the data collected in the military recruitment sources. More specifically, this research combines in a dynamic indicator, calculated on the basis of the young men recruited in Extremadura (Spain) between 1901 and 2001, born between 1880 and 1980, three variables: height, life expectation and literacy. These variables come from the anthropometric and demographic information that the so-called Actas de Reclutamiento (Conscription Proceedings) provide in Spain. With the combination of these three variables and following the path of the works made by Costa and Steckel for the United States, Floud and Harris for Great Britain, Sandberg and Steckel for Sweden, Twarog for Germany or Crafts for Western Europe, we intend to know the historical evolution of wellbeing in one of the least developed region in Europe.

Anthropometric history and the measurement of wellbeing

Bernard Harris

Anthropometric history has been conceptualized as a way of measuring (net) nutritional status, the ‘biological standard of living’, and a composite index of human welfare combining the impact of dietary inputs with the external demands placed by work and the disease environment on the human body. However, there are also limitations. Variations in average height reflect the impact of diet and environmental conditions from conception to maturity, but reveal little about health in later life (though they may of course influence it). The available data continue to be dominated by males, raising questions about the relative invisibility of female wellbeing. Controversy continues to surround such issues as the ages when adult (mature) height is determined, selection biases and truncation issues. How do these issues affect height’s capacity to act as a ‘mirror of the condition of society’?

Anthropometric history has been conceptualized as a way of measuring (net) nutritional status, the ‘biological standard of living’, and a composite index of human welfare combining the impact of dietary inputs with the external demands placed by work and the disease environment on the human body. However, there are also limitations. Variations in average height reflect the impact of diet and environmental conditions from conception to maturity, but reveal little about health in later life (though they may of course influence it). The available data continue to be dominated by males, raising questions about the relative invisibility of female wellbeing. Controversy continues to surround such issues as the ages when adult (mature) height is determined, selection biases and truncation issues. How do these issues affect height’s capacity to act as a ‘mirror of the condition of society’?

2nd half

Territorial educational disparities and the regional convergence process -- Colombia 1900 – 1955

María José Fuentes-Vásquez

This paper aims to contribute to the debate on the inequality of human capital in the development of developing countries focusing on the Latin American context. The main goal here is to analyze if there was a convergence process in schooling levels among regions in Colombia from 1900 to 1958, and it looks for contributing new evidence for understanding why the income convergence process started in the early decades of the 20th Century. Using a new disaggregated database and analyzing the departmental enrollment in primary education, results confirm the existence of sigma and beta-convergence in education during that period. However, results related to mobility showed, on the one hand, a pattern of improvement in schooling levels in the most backward regions. On the other hand, there was a simultaneous process of deschooling in the regions where coffee expansion and industrial development occurred in the early 20th century.

This paper aims to contribute to the debate on the inequality of human capital in the development of developing countries focusing on the Latin American context. The main goal here is to analyze if there was a convergence process in schooling levels among regions in Colombia from 1900 to 1958, and it looks for contributing new evidence for understanding why the income convergence process started in the early decades of the 20th Century. Using a new disaggregated database and analyzing the departmental enrollment in primary education, results confirm the existence of sigma and beta-convergence in education during that period. However, results related to mobility showed, on the one hand, a pattern of improvement in schooling levels in the most backward regions. On the other hand, there was a simultaneous process of deschooling in the regions where coffee expansion and industrial development occurred in the early 20th century.

Age gap as measure of gender inequality -- Evidence from Anglican Cape Town

Johan Fourie and Robert Ross

The age gap at marriage is often used as a proxy for gender inequality (Goody 1983, Wrigley et al. 1997, De Moor and Van Zanden 2010). Differences between Northern Europe and Southern Europe – Hajnal’s European Marriage Pattern, with Southern Europe exhibiting large differences between the age of the husband and wife at marriage – are often attributed to the ‘way in which the marriage contract was organized’, in other words, religious differences. We use a novel dataset of Anglican marriages in Cape Town to show how the age gap can also be used to explore inter-racial differences within the same church. Informed by anthropometric and sociological research, we attempt to explain the surprisingly small age gap at marriage for the Coloured population in Cape Town.

The age gap at marriage is often used as a proxy for gender inequality (Goody 1983, Wrigley et al. 1997, De Moor and Van Zanden 2010). Differences between Northern Europe and Southern Europe – Hajnal’s European Marriage Pattern, with Southern Europe exhibiting large differences between the age of the husband and wife at marriage – are often attributed to the ‘way in which the marriage contract was organized’, in other words, religious differences. We use a novel dataset of Anglican marriages in Cape Town to show how the age gap can also be used to explore inter-racial differences within the same church. Informed by anthropometric and sociological research, we attempt to explain the surprisingly small age gap at marriage for the Coloured population in Cape Town.

Land, Ladies, and the Law -- Using the Legal System to Maintain Livelihood and Wellbeing in Nineteenth Century Siam

Thanyaporn Chankrajang and Jessica Vechbanyongratana

Landowners in nineteenth century central Siam, of whom a significant proportion were women, enjoyed usufruct land rights that were acknowledged through government-issued land deeds and tax documents. Towards the end of the nineteenth century, smallholder land rights were often challenged by investors and local elites in the wake of increased demand for both agricultural and urban land due to a significant expansion of Siam’s international rice trade and Bangkok’s rapid urbanization. This paper assesses the use of Siam’s legal system by smallholders, especially women who had limited legal and political power at the time, to recognize their traditional land rights in Bangkok and surrounding areas, thus preserving their livelihoods as agriculturists and household wellbeing.

Landowners in nineteenth century central Siam, of whom a significant proportion were women, enjoyed usufruct land rights that were acknowledged through government-issued land deeds and tax documents. Towards the end of the nineteenth century, smallholder land rights were often challenged by investors and local elites in the wake of increased demand for both agricultural and urban land due to a significant expansion of Siam’s international rice trade and Bangkok’s rapid urbanization. This paper assesses the use of Siam’s legal system by smallholders, especially women who had limited legal and political power at the time, to recognize their traditional land rights in Bangkok and surrounding areas, thus preserving their livelihoods as agriculturists and household wellbeing.

Immigrants in 1850s New York City -- Savings Behavior and Economic Mobility

Simone Wegge, Tyler Anbinder, and Cormac Ó Gráda

The Emigrant Industrial Savings Bank (EISB) opened its doors in New York City in 1850 with the goal of serving the Irish immigrant community. Savings accounts were a novel kind of financial vehicle for most people in the middle and lower classes. We investigate the EISB depositors between 1850 and 1858, most of whom were recent famine immigrants from Ireland. The opportunity to save provided individuals a way to start afresh and to improve their well-being, specifically by saving money for future economic and family objectives. In this paper we look at who saved more and who saved less and which individual characteristics mattered. We have traced some depositors to the 1860 U.S. census, and we examine if the amount saved was related to their ability to move up the occupational ladder. This paper provides a new perspective on the economic mobility of the famine immigrants from Ireland.

The Emigrant Industrial Savings Bank (EISB) opened its doors in New York City in 1850 with the goal of serving the Irish immigrant community. Savings accounts were a novel kind of financial vehicle for most people in the middle and lower classes. We investigate the EISB depositors between 1850 and 1858, most of whom were recent famine immigrants from Ireland. The opportunity to save provided individuals a way to start afresh and to improve their well-being, specifically by saving money for future economic and family objectives. In this paper we look at who saved more and who saved less and which individual characteristics mattered. We have traced some depositors to the 1860 U.S. census, and we examine if the amount saved was related to their ability to move up the occupational ladder. This paper provides a new perspective on the economic mobility of the famine immigrants from Ireland.