economic assignment due in 36 hours
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5.OverviewhumandmentEc21282017.pptxChina’s Quality of Life/Human Development
Ec 2128A/China’s Economy
2017
Questions
What do we mean by quality of life, or human wellbeing?
How is quality of life or human wellbeing measured?
In Class: Human Development
What is human development?
Relationship to growth
China’s record
Health
Education
Incomes/consumption
Note: Inequality & Poverty later in the term
Readings: II.C.
Some on ”human development” concept and China’s record
Some on human rights, political reform in China
Some on China environmental issues
Human Development (HD): What is it?
“The basic objective of development is to create an enabling environment for people to live long, healthy and creative lives. This may appear to be a simple truth. But it is often forgotten in the immediate concern with the accumulation of commodities and financial wealth.”
“Human development is a process of enlarging people’s choices. The most critical ones are to lead a long and healthy life, to be educated and to enjoy a decent standard of living. Additional choices include political freedom, guaranteed human rights and self-respect…”
(UNDP Human D’ment Report 2010)
HD: What is it?
Multifaceted—about capabilities, choices, opportunities, wellbeing, including
Health
Education
Income and consumption
Inequality
Poverty
Environment
Rights and freedoms
HD: Nice Idea, but How to Measure it?
MAIN MEASURES of HD
Health
Life expectancy at birth, child mortality
Education
Literacy, enrolments, years of schooling (average & expected)
Income
PPP GNI per capita, household income per capita
Human Development Index (UNDP)
composite index based on the above measures
OTHER COMMON MEASURES
Inequality
Income ratios, Lorenz curve, Gini coefficient, other inequality indices
Gaps by gender, ethnic group, urban/rural, etc.
Deprivation
Poverty: headcount, poverty gap, etc.
Nutritional: height for weight (stunting)
Access to: clean water, shelter, etc.
UNDP publishes expanded HD indices that incorporate some of these additional items
YET MORE MEASURES…
Environment/sustainability indicators
“Green” GDP, carbon emissions, …
Political indices
World Bank World Wide Governance Indicators, Freedom House (political rights, civil liberties)…
Subjective wellbeing
Subjective happiness or life satisfaction: “Taking all things together, how satisfied are you with your life as a whole these days? Would you say you are very satisfied, somewhat satisfied, somewhat dissatisfied, or very dissatisfied?”
Happy life expectancy: Life expectancy x subjective happiness
see Kahneman & Krueger, J. of Econ. Perspectives 2006, for discussion
HD & Growth
UNDP Human Development Report (2010) finds:
Levels of GDP per capita are correlated with higher levels of basic HD indicators (health, ed.)
Growth in GDP per capita is not highly correlated with improvements in basic HD indicators
Consequences of growth depend on the distribution of that income
Many programs that improve health and education are not overly costly, can occur at lower GDP/capita
Note: Growth in personal incomes is associated with improved health and education at the micro level
HD & Growth (UNDP Human Development Report, 2010)
Two-way causality complicates the story
Growth in GDP per capita can affect levels of health, education, inequality, etc.
Levels of health, education, inequality can influence GDP growth
Large literature in economics about the complex relationship between
Growth and education
Growth and inequality
HD in China
Look at some statistics on
Life expectancy
Infant mortality
Average years of schooling
Enrolment ratios
Personal incomes
Change over time
Diversity within China
Health: China over time
| Early 1950s | 1982 | 1990 | 2000 | 2010 | 2014 | |
| Life expectancy | 41-45 | 68 | 69 | 71 | 73-75 | 77 |
| Infant mortality | 180-195 | 49 | 38 | 29 | 17 | 9 |
Life expectancy = expected lifespan at birth
Infant mortality = number of deaths per 1000, up to age 1
Data sources: China HDR (various issues), World Development Indicators, NBS,
Health: China
Dramatic improvements in health over time
Life expectancy has nearly doubled
Current highest in the world are 80-83 (Japan, HK, Canada, Sweden, ); US is 79.
In 1950s 1/5 infants died; 2010 less than 1%
Current lowest in the world are 2/1000 (S’pore, Japan, Sweden, Norway…); US is 9/1000; Canada is 4/1000.
Much of the improvement occurred during Maoist era
Health: Variation within China
| Low | National Average | High | |
| Life expectancy (2014) | 70 Tibet, 72 Yunnan, Qinghai | 77 | 82 Shanghai, Beijing |
| Infant mortality (2000) | 3.7 Beijing, 4.0 Tianjin | 24 | 60 Yunnan & Guizhou |
Life expectancy = expected lifespan at birth
Infant mortality = number of deaths per 1000, up to age 1
Data sources: China HDR (various issues), Bigname-Van Assche 2005
http://paa2005.princeton.edu/download.aspx?submissionId=50710
Health: China
Substantial variation within China
Beijing, Shanghai, Tianjin resemble developed countries
Coastal developed provinces & NE also good
Lowest health in
Poor inland provinces (e.g., Gansu, Qinghai)
Some SW minority provinces (Tibet, Yunnan, Guizhou)
Provinces with lowest health similar to
Infant mortality: India, Ghana, Bangladesh
Life expectancy: Bolivia, Russia, Egypt, Kazakhstan
Education: China
| Early 1950s | 1982 | 1990 | 2000 | 2010 | |
| Illiteracy | 75-80% | 23% | 16% | 7% | 4% |
| Primary net enrolment | 20-25% | 93% | 98% | 99% | 99% |
| % with junior secondary | 4.7% (1964) | 17.9% | 23.3% | 34.0% | 38.8% |
| % with tertiary | 0.4% (1964) | 0.6% | 1.4% | 3.6% | 8.9% |
| Mean/ expected years of schooling | 3.7/8.4 (1980) | 4.9/8.9 | 6.6/9.5 | 7.5/11.7 |
Illiteracy = % illiterate out of adult population; primary net enrolment = % of primary
school age children enrolled in primary school; expected years of schooling are the
expected years for a child entering school, if prevailing schooling patterns continue.
Data sources: NBS; Knight, Sicular and Yue 2011; http :// hdrstats.undp.org/images/explanations/CHN.pdf
Education: over time
Dramatic improvements over time
Illiteracy, primary enrolment rates similar to developed countries
Enrolments drop off at senior middle school, university levels
China’s tertiary ed. rate lower than OECD (avg. 30%; US 40%, Canada 50%); similar to Brazil, India
Much improvement in basic education during Maoist era; progression to higher levels took place later, during Reform era.
Education: China
| Low | National Average | High | |
| Illiteracy (2010) | 1.7% Shanghai, 1.9% Jilin, Liaoning | 4.1% | 24.4% Tibet, 10.2% Qinghai |
| Jr. Secondary School (2010) | 12.9% Tibet, 25.4% Qinghai | 38.8% | 45% Shanxi, Heilongjiang, Liaoning |
| Tertiary (2010) | 5.5% Tibet 5.8% Yunnan | 8.9% | 31.5% Beijing, 22.0% Shanghai |
Data sources: NBS.
Education: China
Substantial variation within China
Beijing, Shanghai resemble developed countries
Coastal developed provinces & NE also good
Lowest in
Poor inland provinces (e.g., Gansu, Qinghai)
Some SW minority provinces (Tibet, Yunnan, Guizhou)
What explains improvements in health & education in China?
Public policies and investments important
Major emphasis on universal, basic health care & education during Mao era
Some deterioration in early Reform Period
Decline in public fiscal capacity
Decollectivization, enterprise reforms
Re-emphasis and recovery in 1990s, and especially since 2000
Changes also in demand for health and education
Human Development Comparisons (2014)
Personal Incomes: China
We have looked at growth and level of China’s GDP per capita, but what about personal incomes?
GDP per capita and personal income per capita are different
Not all GDP goes to individuals/households
Undistributed business & gov income/profits
China: GDP per capita > personal income per capita
Growth in the two is also different
China: growth in GDP generally > growth in personal income per capita
Personal Incomes: Maoist Era
On average, household income per capita increased from 1950 to 1957
Big drop during Great Leap Forward (1958-1961)
Recovered in early 1960s, then stagnant
SO: by late 1970s, household income about the same as in mid-1950s
Maoist era growth in personal incomes < growth in GDP per capita
Personal Incomes: Reform Era
Substantial growth in personal incomes
Since late 1970s/early 1980s, per capita household incomes have grown about 7.5% per year
Per capita incomes in 2014 were 13-14 times higher than in 1978
Per capita incomes in 2014 were 2.4 times higher than in 2004
But: Growth in personal incomes slower than growth in GDP per capita
Average Annual Growth in Household Incomes Per Capita
| Urban Households | Rural Households | GDP per capita | |
| 1980-1990 | 4.7% | 9.9% | 8.3% |
| 1990-2000 | 6.8% | 4.5% | 9.3% |
| 2000-2014 | 9.2% | 7.9% | 9.2% |
Notes and Source: Constant prices. Official statistics from
NBS statistical yearbooks.
Quality of Life: Other Aspects
Inequality and poverty (later in the term)
Maoist era: low inequality and low incomes (high poverty)
Reform era: rapid increase in inequality, remarkable decline in poverty
Note: inequality has declined in the past few years
Human rights, civil liberties, economic & political freedoms (readings)
Much improved during the reform era
But: ongoing issues in civil liberties, political freedoms
Environment (readings)
Major problems before and since 1978
In recent years: policy efforts to address these problems
Quality of Life Summary: Much Progress, but Uneven
In important ways, the quality of life in China has improved
Health, education: since 1950
Personal incomes: since 1980
Substantial differences over time, regionally
Outline
I. National Product: Growth and Level √
A. Measurement issues √
B. GDP growth & level √
II. Structural Change √
III. Productivity √
IV. Human Development, Quality of Life √
China’s Economic Performance: Summary
1. China achieved respectable or high rates of growth in nat'l product, depending on the period
2. Substantial structural change, altho’ somewhat distorted in favour of industry, especially before the reforms
3. Slow productivity growth until the reform period; positive productivity growth since.
4. Human d'ment: much progress, but uneven.
China’s Economic Performance: Summary, cont.
How do we explain this record of economic performance?
During the rest of the term, we will cover topics that help explain, e.g.
China’s development strategy
Government policies
Institutions, e.g., ownership
Demographic change
To some degree it reflects the nature of the inherited economy: the “initial conditions”
