The Evolution of World Inequality in Well-being

Decancq Koen , Decoster André and Schokkaert Erik (2007), The Evolution of World Inequality in Well-being, Discussion Paper DPS 07.04, Center for Economic Studies, Leuven.

In this paper we investigate the evolution of the inequality in well-being across different countries between 1975 and 2000. We treat well-being as a multidimensional concept focusing on three important dimensions of life: standard of living, health and education. Inequality in the three dimensions shows a different trend between 1975 and 2000. We propose a flexible measure of well-being and use the tools offered by the recent literature on multidimensional inequality measurement to quantify the evolution of overall intercountry well-being inequality. The empirical results are nuanced, and sensitive to different normative choices on the trade-offs between the different dimensions. In particular the concave transformation of income turns out to be decisive for the evolution of world inequality in well-being.