Economic growth is defined as an increase in the capacity of an economy to produce goods and services compared from one period of time to another.(Investopedia par 1). It can also be put into two categories: consumer and capital goods. So to what extent does economic growth affect the quality of live? Quality of life being a subjective measure of happiness dependable on the financial situation, and is an important component of it.(Investopedia par2) Further on quality of life includes many things.
Such as prosperity and security in such region, job satisfaction, family life, health and overall safety. (investopedia par 2) the correlation between these two factors is existent, but it begs the question to what extent? And how significant the economic change has to be to affect standard of living? The true question would be to what extent did economic growth change the happiness of life and the people?Firstly, lets at both way economic growth can influence standard of living. Deciding if economic growth is affecting the contentment is subjective and because of this the economist can not make concrete arguments. However, there could still be speculations backed up by facts. Economic growth leads to an increase of GDPAnd focusing on the specifics when it comes to quality of life, economy growth can have huge impact on a country. More wealth in the country, means improvement in aspects such as public services,reducing poverty and unemployment therefore elucidating the impression that economic growth is positively affecting quality of life.
Increased consumption. Customer consuming and spending on goods and services lead economists to believe that consumption is related to utility. Theorising, that when there is an increase in consumption in a country , there is also an increase in wealth of the overall population. Improvement in services offered to the public such as health and education.
With increased GDP the taxes increase as well, giving a country more profit to invest in healthcare and educational systems. Improving healthcare can increase standards of life, just by increasing the lifespan of people by dealing with, and preventing life threatening aspects such as diseases. Having said investing and improving educational systems can also have a positive effect on the quality of life. Increasing the standards that were set up, educational wise, the increase of diversity takes place. Such as different skills and literacy.
Also the better the educational system for the society, and individuals, leads to better GDP, increase in motivation and development, production, and greater opportunities. It should be noted that education is a key influencer of happiness and welfare. Level of productivity is the complete amount of services and goods which a country is able to produce, the quality of life it can offer to people. It depends on the different leves of productivity in different branches economy such as industry, agriculture transport and many more. If the personal productivity engaged in economic branches is high so will the national output and quality of life.
The productivity difference is one of the most important influencers of different quality of life in countries. An example of this would be the case in 1951 where productivity per person in india was just 147 while in America 2,722 dollars, The same sgriculture engagment per person was 1,806 in UK and 2.336 in Canada. Not to mention that the engagement of the same kind but directed into manufactoring was 2,815 in Canada, 5,488 in America, 1,332 in the UK and then again 320 only in India. The interesting thing is that the situation has not developed much, so it is not that different today.
In developed countries worker on a farm and such, has the acsess to a better developed machinery and more money for production, while in underdeveloped countries the same worker would have to work with less advanced equipment and possibly smaller one. To summyrise, in developed countries can use the advatage of advanced technology while under developed countries are left behind, and the advance of technology and use is not possible. The economic growth also leads to decrease in unemployment and poverty. People tend to be dissatisfied if they are unemployed.That influences their overall quality of life and happiness. This can be turned around, and that is when there are more job opportunities offered.
This possibility is higher when economy is growing rather than the opposite. Unemployment is also connected to crime, since it is a source of low level crimes. So when unemployment decreases, the crime and alienation do as well. However this is partially considered a theory because despite the fact that in EU the high unemployment still remains, even though since Second World War the economy has grown, and did so quite fast. In France And Spain there are high levels of structural unemployment, this means that there are high levels of unemployment because there is discrepancy between the open job positions and the level of skills unemployed have. It is not caused by business cycle but by a underlying shift in economy. However, if a segment of people residing in the country is living in a complete poverty, economic growth does not allow for people to have higher incomes, and because of this, the same people can not afford basic needs for a normal life such as food and shelter This means that even though economy growth does improve lives of people living in partial poverty, it does not fix the problem of those living in a complete one. Economic growth also has a bad effect on quality of life.
This can be seen by collecting data prior to this year and comparing if happened in other countries. Things like Increased inequality, diminishing results, externalities of growth show us in which ways. Increased inequality. It is a paradox, meaning it can be good and bad. To ensure that economic growth is causing inequality to decrease we can go back firstly to 1950s and 1960 when economic growth was properly managed and it was a perfect example of how it can positively influence quality of life.
Having said that if it is not managed properly, it can actually have the opposite effect, we can confirm this by going back to 80s and 90s, where economic growth actually increased inequality,which negatively rather than positively influences quality of life.Yet another factor that is effected by economical growth is the way a country is distributing their income. Now even though the economy is improving the goverment needs to divide the GDP and use it properly or there wont only be big inewuality but imbalance as well. If there is hudge inequality the quality of life will be hgher when it comes to rich people, while when it comes to unwealthy it can create the opposite effect.Even prices can contribute to quality of life. Usually , not always when economy grows so do the prices. Sometimes it is just set for the countryy, so some countries have high prices while others do not.
And this can negatevly affect peoples life. Taking itno consideration the national income if prices are higher the quality of life will be lower and if the prices are lower the opposite effect occurs. The opposite of expected, crime rate can sometimes increase when economy grows. Theorising, we can assume that not all crimes, or majority are influenced by poverty or posible wealth.
Some reaslons as to why the crime rate increased was that there were more products to steal. In 1930s common thefts as today, such as mobile, car tefts almost did not exist. By increasing economy, there is a increas in product that could be stolen. However in America the crime reduced, so it can go both ways. Even though economic growth has allowed for that country to improve their healthcare,there has been a sudden rise of new diseases that was not expected. An obvious example would be obisity. While half of the population wanted to improve their lifestyle by lossing weight the other half gained it.Nevertheless the economic growth is not the only factor that influences quality of life.
Level of education. In theory people with education, or higher education than others have a high quality of life. Even in case where as illiterate or uneducated people ended up wealthy, it is still believed that they would misspend the wealth in a numerous ways, some of them being indolding in various activities and habits that can be expensive.
Size of the family. Usually the standard of living is lowered if a family is larger, because logically the wealth and income has to be spread in a family. So the larger the family the lower the quality of life.
This can be prevented by planning in advance. It is not just a size of the family but also the population. More specifically the amount of people residing in a country. India, for example is overcrowded compared to its resources.
The population has crossed its optimum. This increases capital per person which also influences the standard of living. The customs , either set by the family or society. Are usually not the necessity, but people in some society will most likely follow the customs set up in that society. People tend to follow norms and practises set by themselves , or most likely others.
Even Traditions. Let’s take India as an example. Many people residing in India have a mystical, spiritual attitude. So even if they could afford an “upgrade on something” or some pleasure they will not accept it.
Their motto seems to be a very simple lifestyle and a bigger focus on a mind rather than owning items. In indiaTaking into consideration everything said prior, economic growth can both affect positively and negatively quality of life. Arguing if it is more positively or negatively is controversial, since it usually depends in which way a country handles the growth, and if the country uses the it (the growth) as the advantage or the opposite, but that is irrelevant when looking at the bigger picture. Nonetheless, a lot of things that indicate a happiness when it generally comes to people are income, job opportunities, production in the country, consuming goods and the availability and rage of goods, which depend on economic growth. With all of this said, quality of life and happiness doesn’t depend solely on GDP and economy. It also depends on size of the population,level of education, and individually size of the family, family traditions, education tastes and disposition, social conventions. For something to be looked on a social level there has to be similarities between individuals living in that region, so that the data can be reliable.
A person’s customs and size of the family and what they subjectively consider quality of live is more likely to concur with the person living in the same region that the one living in Russia. In the end, yes economy does affect standard of living, but to a some extent since we cannot disregard the other factors affecting quality of life.