Exploring the Linkage between Income Inequality, GDP and Human Well-Being

Article Information
Journal: Business and Economics Research Journal
Title of Article: Exploring the Linkage between Income Inequality, GDP and Human Well-Being
Author(s): Shashank Vikram Pratap Singh, Sumanjeet Singh
Volume: 11
Number: 3
Year: 2020
Page: 621-634
ISSN: 2619-9491
DOI Number: 10.20409/berj.2020.273
Abstract
The scorning of gross domestic product (GDP) is as old as its birth. Income inequality and ensuring human well-being are few out of many causes of its fulmination. Existing literature on the concern issues reveals that, where there are great disparities in wealth, there are heightened level of social distrust. Poor countries having reasonable distribution of wealth are much better in terms of health and happiness of people than in rich countries having unfair distribution of wealth. It has also been found that, people’ health are better in the more equally income distributed societies than the societies having highly skewed distribution of income. It has repercussion effect in the form of reduction of workforces’ productivity, upsurge in national expenditures on health, and diversion of resources from prolific endeavours to somewhere else. These are results of growth driven policies which ensure improvements in GDP indicator without assuring improvements in the human well-being. The status of income inequality raises questions on the sustainability of GDP driven development. Hence there is a need for an alternative. This paper is an attempt to discuss the issues concerning rise in income inequality and to shift our focus towards Human Well-Being approach as an alternative to GDP approach.

Keywords: GDP, Income Inequality, Happiness, Human Well-Being

JEL Classification: I31, D63, O47

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