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The pace and scale of China's economic transformation have no historical precedent. In 1978, China was one of the poorest countries in the world. The real per capita GDP in China was only one-fortieth of the U.S. level and one-tenth the Brazilian level. Since then, China's real per capita GDP has grown at an average rate exceeding 8 percent per year. As a result, China's real per capita GDP is now almost one-fifth the U.S. level and at the same level as Brazil. This rapid and sustained improvement in average living standard has occurred in a country with more than 20 percent of the world's population so that China is now the second-largest economy in the world. I will begin by discussing briefly China's historical growth performance from 1800 to 1950. I then present growth accounting results for the period from 1952 to 1978 and the period since 1978, decomposing the sources of growth into capital deepening, labor deepening, and productivity growth. But the main focus of this paper will be to examine the sources of growth since 1978, the year when China started economic reform. Perhaps surprisingly, given China's well-documented sky-high rates of saving and investment, I will argue that China's rapid growth over the last three decades has been driven by productivity growth rather than by capital investment. I also examine the contributions of sector-level productivity growth, and of resource reallocation across sectors and across firms within a sector, to aggregate productivity growth. Overall, gradual and persistent institutional change and policy reforms that have reduced distortions and improved economic incentives are the main reasons for the productivity growth.

In this paper, we revisit two pieces of conventional wisdom in the current debate about poverty, paying close attention to the price data underlying these findings: that the poor pay more than households of higher income for the goods and services they purchase; and that poverty rates, at least as measured by the U.S. Census, have remained essentially flat since the late 1960s, raising questions about the success of the policies implemented to reduce poverty. By examining scanner data on thousands of household purchases, we find that the poor pay less—not more—for the goods they purchase. And by extending the advances on price measurement in the recent decade back to the 1970s, we find that current poverty rates are less than half of the official numbers.

During 2006, the Gallup Organization conducted a World Poll that used an identical questionnaire for national samples of adults from 132 countries. I analyze the data on life satisfaction and on health satisfaction and look at their relationships with national income, age, and life-expectancy. Average life satisfaction is strongly related to per capita national income; each doubling of income is associated with a near one point increase in life satisfaction on a scale from 0 to 10. Unlike most previous findings, the effect holds across the range of international incomes; if anything, it is slightly stronger among rich countries. Conditional on national income, recent economic growth makes people less satisfied with their lives, improvements in life-expectancy make them more satisfied, but life-expectancy itself has little effect. In most countries, except the richest, older people are less satisfied with their lives. National income moderates the effects of aging on self-reported health, and the decline in health satisfaction with age is much stronger in poor countries than in rich countries. In line with earlier findings, people in much of Eastern Europe and in the countries of the former Soviet Union are particularly dissatisfied with their lives and with their health, and older people in those countries are much less satisfied with their lives and with their health than are younger people. HIV prevalence in Africa has little effect on Africans’ life or health satisfaction; the fraction of Kenyans who are satisfied with their personal health is the same as the fraction of Britons and higher than the fraction of Americans. The US ranks 88th out of 120 countries in the fraction of people who have confidence in their healthcare system, and has a lower score than countries such as India, Iran, Malawi, Afghanistan or Angola . While the strong relationship between life-satisfaction and income gives some credence to the measures, as do the low levels of life and health satisfaction in Eastern Europe and the countries of the former Soviet Union, the lack of correlations between life and health satisfaction and health measures shows that self-assessed life or health evaluations cannot be regarded as useful summary indicators of human welfare in international comparisons.

By many measures, a revolution in the human condition is sweeping the world. Most people today are better fed, clothed, and housed than their predecessors two centuries ago. They are healthier, live longer, and are better educated. Women’s lives are less centered on reproduction and political democracy has gained a foothold. Although western Europe and its offshoots have been the leaders of this advance, most of the less developed countries have joined in during the 20th century, with the newly emerging nations of sub-Saharan Africa the latest to participate. Although the picture is not one of universal progress, it is the greatest advance in the condition of the world’s population ever achieved in such a brief span of time. The purpose of this article is to sketch this worldwide change over the past two centuries in the standard of living, broadly conceived. I start with a short discussion of the standard of living concept, proceed to individual components of the standard of living, and conclude with a few summary observations.

This paper explores the implications for economic analysis, societal well-being, and public policy of the movement of care services (such as child and elder care) from home to market. A broad empirical overview sets the stage for the argument that this process cannot be properly evaluated using only a priori judgments about the suitability of marketization. The context in which markets operate is crucial, and while the growth of market provision poses some risks, it also offers some potential benefits.

Was the War on Poverty a failure or a success? Official U.S. poverty statistics based on household income imply that the War on Poverty ended in failure. According to the Bureau of the Census, the proportion of the U.S. population below the poverty level of income reached a minimum of 11.1 percent in 1973. This ratio rebounded to 15.2 percent in 1983 and has fluctuated within a narrow range since then, giving rise to the widespread impression that the elimination of poverty is difficult or even impossible. 1 However, poverty estimates based on household consumption imply that the War on Poverty was a success. Jorgenson and Slesnick (1989) showed that the proportion of the U.S. population below the poverty level of consumption fell to 10.9 percent in 1973, only slightly below the poverty incidence as measured by income in that year; the poverty ratio for consumption declined further, reaching 6.8 percent in 1983. Slesnick (1993) presents estimates of poverty ratios incorporating consumption data from the Consumer Expenditure Survey, conducted by the Bureau of Labor Statistics. The poverty rate for consumption fell to 9.7 percent in 1973 and reached a low of 8.7 percent in 1978 before rising to 12.0 percent in 1980. The consumptionbased poverty rate then declined to a new low of 8.3 percent in 1986, ending at 8.4 percent in 1989. Calibrating consumption to levels reported in the U.S. National Income and Product Accounts, Slesnick obtained a poverty rate of 4.1 percent in 1978 and a postwar low in 1989 of only 2.2 percent. 2 1 The persistence of poverty, as reflected in the official statistics, is discussed by Sawhill (1988). 2 Slesnick (1993) presented a detailed decomposition of the differences between estimates of poverty rates based on consumption and the official estimates based on income. Neither measures of consumption from the Consumer Expenditure Survey nor measures of income used by the Bureau of the Census include in-kind transfers. Slesnick (1996) discussed the effects of these transfers on measures of poverty.

Since 1985, the World Bank has been collecting household survey data in developing countries that provide a rich source of information for assessing household welfare, understanding household behavior, and evaluating the impact of government policies. This article describes these household surveys, known as Living Standards Measurement Study (LSMS) surveys, and explains how to obtain their data. LSMS surveys have been implemented in over twenty developing countries and have been used to analyze poverty, labor markets, health and education pricing policies, determinants of school performance, savings and consumption smoothing, health and nutrition policies, and gender and fertility issues.

iven the major changes now being implemented in programs aimed atalleviating poverty in the United States, it is important to have a goodunderstanding of how the extent of poverty has evolved over the lastcouple of decades. Has poverty gotten worse, or have we been gradually winningthe war on poverty?There is unanimous agreement that there was a steady, and dramatic, decreasein the percentage of the U.S. population in poverty during the 1960s. The officialU.S. Census Bureau figures show the poverty rate dropping from 22.4 percent ofthe population in 1959 to 12.6 percent in 1970, with a further decrease to11.1 percent in 1973. The trend since 1973 is not as clear. The official poverty raterose somewhat during the latter part of the 1970s, and then sharply increased dur-ing the recession of the early 1980s, reaching 15.2 percent in 1983. It then graduallydeclined, hitting 12.8 percent in 1989, increased to 15.1 percent in 1993, and thendropped to 13.8 percent in 1995. According to the official rate, even at the peakof the economic expansion of the late 1980s there was a higher percentage of thepopulation with income below the poverty line than there was 20 years earlier.Poverty does seem to have gotten worse.This conclusion is controversial, however, because the way in which poverty isbest measured is controversial. The official poverty scale has been criticized alonga number of dimensions. One point of contention is whether people should bedefined as being poor when they are part of a family with