Living standards in a modernizing world – a long–run perspective on material wellbeing and human development

Abstract

Since the spread of industrialization, which began in England in the second half of the eighteenth century, many countries took off on a development path leading to modern economic growth. The process of modernization resulted in a 16-fold increase in the standard of living of the average world citizen. Productivity growth and structural change, however, was characterized by uneven development, within and across nations. This chapter discusses the various ways in which welfare growth is measured and how the different aspects of quality of life such as inequality, health and leisure have developed in the long run. The chapter closes with a discussion of an historical index of human development across world regions since 1870. It conjectures that social indicators are becoming more dependent again on income growth, in contrast to the experience of the first half of the twentieth century.