Nova workboard

a blog from young economists at Nova SBE


How the inequality of the quality of life measures changed

In the course of industrialization, poverty – and especially relative poverty due to rising income inequalities – became more visible and thus more important in poverty research. New social classes evolved and the „social question“ arose. It was the first time that misery affected a huge part of the population and people moved to urban areas making poverty even more visible. 

But this picture changes if we do not only consider a unidimensional approach using income but also consider a multidimensional measurement taking account of differences in features such as lifetime expectancy, stature or literacy. 

Comparing the income data from developed countries such as England, we can see that the income inequality clearly rose. Using the Gini coefficient – with OECD data after taxes and transfers – we see that the index increased from around 0.26 to almost 0.35 in the last 30 years. But other factors actually narrowed. The twentieth century contrasts sharply with the record of the two centuries before and in every measure of those mentioned above the gains of the lower classes have been far greater than those experienced by the population as a whole, whose overall standard of living has also improved. Even if those indicators are significantly correlated with income and Gini coefficients, the anthropometric measures reveal important aspects of welfare. 

If we analyze data before and after industrialization, we see that the difference in the stature (referring to the height) of a person between rich and poor people diminished from 3% to only 1%.  The data for the preindustrial difference are taken from a study comparing the stature of simple English soldiers, considered to be poor, with the stature of Sandhurst cadets, which were trained at an elite military school and thus considered rich. To compare the difference in modern society the same study analyzed data from the former social classes I (professional) and II (intermediate) with the classes IV (skilled manual) and V (unskilled manual). As stature is an indicator for the health environment and nutrition of a person we can see that the living conditions of poor and rich people must have assimilated in some way. This is supported by the fact that especially an increase in height is due primarily to improvements in socioeconomic conditions rather than to genetic factors.

The change in the difference between poor and rich is even bigger if we analyze life expectancy. The life expectancy in preindustrial England of the poorest testators was only 33 at birth, compared to 39 for the richest. The poorest testators in this study were consider to be the ones leaving less than 25£, the richest leaving 1.000£ or more. This leads to a difference of 18% in the 1790´s and 1800´s which diminished to 9% when we look at data from 1997-2001 comparing social class I with social class V.

The most extreme change can be seen if we analyze the literacy rate of people. In preindustrial England the difference between poor and rich people was 183% if we use the same data for comparison as for life expectancy. This difference diminished to 14% in modern England if we analyze the percentage of persons not achieving entry-level literacy of social class V. 

Thus the life prospects for the rich were markedly better than those for the poor in the preindustrial era. In terms of the general life prospects of the rich and the poor, therefore the Industrial Revolution seems to have narrowed the differences even more than would be suggested by measures of income distribution alone.

 

Julia Seither

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