Income and Wealth
Abstract:Income and wealth are essential components of individual well‐being. Income allows people to satisfy their needs and pursue many other goals that they deem important to their lives, while wealth makes it possible to sustain these choices over time. Both income and wealth enhance individuals' freedom to choose the lives that they want to live, though there are some aspects of their lives that cannot be bought by money. This chapter presents a set of indicators that aims to provide a coherent, but non‐exhaustive, picture of the economic conditions of people and households. The indicators measure the principal components that shape material conditions, their dynamics and how they are distributed within each country. This chapter finds that income and wealth have been substantially enhanced during the last fifteen years. However, this rise did not lift all boats: income inequality has been rising in many countries, and some groups have been left behind. This suggests that growth‐oriented policies need to be designed to take into account distributional considerations.
Document Type: Review Article
Publication date: October 1, 2011