poverty and poor health
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Herman de Jong from the University of Groningen, explores health and human welfare in the 20th century, with a focus on escaping early death, poverty and poor health

Over the centuries, human societies have gone through countless transformations affecting the wellbeing, health and quality of life of people around the world. In many parts of the world, the advent of the 20th century resulted in a clear break from the challenging past marked by widespread poverty and illness. Nobel laureate Professor Angus Deaton described it as a ‘Great Escape’ from the previous reality marked by early death, poverty and poor health. Despite the devastating world wars and economic struggles that marked the first half of the 20th century, this historical period brought exceptional advances in health and human welfare of a large number of countries.

Traditional indicators of human living standards, like Gross Domestic Product (GDP) per capita, do not capture adequately these improvements in welfare trends. (1) Nowadays, in addition to GDP, economists consider other important factors affecting living standards within nations, including working wages, consumption, mortality rates, life expectancy, inequality, schooling and leisure time. Using a multi-dimensional framework of human development, we can take a new and closer look at changes in human living standards and health during the 20th century.

A better understanding of the changes brought by the 20th century could have far-reaching implications for the present day. This includes informing how we should best measure the welfare of nations and encouraging the use of more comprehensive approaches that consider a range of different dimensions of the economy and citizens’ health.

Human welfare in the early 20th century

Applying this broader welfare approach, Daniel Gallardo Albarrán reported in a recent paper that income growth significantly underestimated welfare growth in Western Europe between 1913 and 1950. (2) Taking Britain as an example, in 1950, British citizens were at far lower risk of infectious diseases, had an increased life expectancy of 16 years, lived in a more equal society and spent almost 500 hours less per year at work compared to 1900. For Europe as a whole, GDP per capita showed an improvement of less than 30% between 1913 and 1950, the composite indicator of welfare suggests that the wellbeing of citizens approximately doubled.

Between 1900 and 1950, death rates declined substantially. By the late 1940s, many European countries had a rate of 9-14 deaths per 1,000 of population, coming down from 16-27 in 1900. Infant mortality decreased from 90 per 1,000 births to 25. Many of these impressive results were the fruit of 19th-century improvements in health, which were driven by the germ theory and by investments in public health, such as the cleaning of water supply, sewage facilities, the setting of housing standards and the clearing of slums. These results persisted, primarily due to further low-cost improvements in sanitation and medical knowledge (new vaccines, antibiotics), which allowed major infectious diseases to be treated.

The global picture of health and human welfare

How do these early 20th century improvements compare with other regions in the world and with the post-WWII period? In a recent study, Leandro Prados de la Escosura has presented a so-called adjusted Historical Index of Human Development. (3) Around 2007 human development levels in Central and Eastern Europe and Latin America matched those of the OECD countries in the late 1960s; in 2007 China and India had achieved levels of OECD in respectively 1960 and 1929. This is mainly an effect of much higher levels of post-WWII life expectancy of developing countries compared with the rich countries in the early 20th century. However, this index also reveals that the gap between OECD countries and the rest has widened again in absolute terms. Although there was educational expansion and recovery of income growth at the end of the 20th century in many areas in the world, the non-OECD areas failed to catch up with the longer life expectancies in the Western world. Within the OECD area, there has been a renewed contribution of life expectancy to human development since 1990, in the present case not from saving the lives of children (which was the first or epidemiological health transition), but from saving the lives of middle-aged and elderly in rich countries. This so-called second health transition has resulted in a falling rate of mortality among the elderly through better treatment and better general health and nutrition circumstances. In its turn it was a result of increasing demand for more healthcare to make our longer life more bearable (‘healthy ageing’), reflecting higher real incomes.

Improved health of the elderly in society is an income-elastic good. If healthcare is becoming more dependent on income growth and less on public policies, like it was in the early 20th century, this may lead to even higher inequality of welfare levels across nations in the future. But we need to put this in the right perspective. Healthcare per capita spending in the U.S. is close to 10,000 dollars per year and is more than two times higher than in the U.K. But this difference is not reflected in differences in life expectancy. Probably, the saving of lives is still mainly an effect of (past) public health measures, better nutrition, access to education and less the result of clinical medicine and interventions.

Health transitions take time

Indeed, annual per capita expenditures on health vary enormously across countries. In most Sub-Saharan African countries, health expenditures fluctuate below or around 200 dollars per person per year. In Bangladesh, Pakistan and India these levels are 88, 134 and 238 dollars respectively. Minimising the exposure to environmental insults during infancy will increase longevity. The distribution of drugs and vaccines in the developing world and impoverished nations to combat tuberculosis, malaria, measles and all kinds of infections will have positive effects on life expectancy at modest costs. History has shown that this is a long process, but it will finally show up in the health statistics.

These research results present a valuable opportunity for both methodological and policy-related developments. From a research perspective, it could lead to the implementation of more comprehensive but realistic measures of welfare that consider a broader range of factors affecting citizens’ wellbeing, including health and health services. Future research may also pay greater attention to trade-offs associated with income and income inequality and could benefit governments and policy-makers by helping them identify critical areas of welfare to prioritise in their interventions. It could also help to shift the primary focus of governments from increasing GDP to developing policies that address a broader range of economic and health-related issues. The 20th century shows that we do not always need economic growth to produce higher levels of wellbeing.

References

(1) H.J. de Jong, “Living Standards in a Modernizing World. A Long-Run Perspective on Material Wellbeing and Human Development,” In W. Glatzer et al (eds.), Global Handbook of Quality of Life. Explorations of Well-Being of Nations and Continents, Dordrecht, Springer, 2015, pp. 45-74.

(2) D. Gallardo Albarrán, “Missed opportunities? Human Welfare in Western Europe and the United States,” 1913-1950“, Explorations in Economic History 72, 2019: 57-73.

(3) L. Prados de la Escosura, “World Human Development: 1870-2007,” The Review of Income and Wealth 61, 2015: 220-247.

 

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Contributor Profile

Professor
Faculty of Economics and Business, University of Groningen
Phone: +31 50 363 3737
Email: h.j.de.jong@rug.nl
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