Economists are often accused of focusing excessively on GDP, with the result that government policies make GDP a priority to the detriment of other contributors to well-being. This research proposes a broader summary statistic that incorporates consumption, leisure, mortality and inequality. While the new statistic is highly correlated with GDP per capita, cross-national deviations are often large: Western Europe looks considerably closer to the United States; emerging Asia has not caught up as much; and many developing countries are further behind. Each component of the statistic plays a significant role in explaining these differences, with mortality being the most important. While still imperfect, the statistic arguably provides better guidance for determining public priorities and evaluating policies than does GDP alone.
Despite the controversy surrounding welfare programs, there is little empirical evidence about the long-term effects of these programs on recipients. In a recent paper, Deshpande (2016), I study the long-term effects of removing low-income youth from a large cash welfare program, using a policy change from the 1996 welfare reform law. I find that youth who are removed from welfare have low earnings and minimal earnings growth in adulthood. The results indicate that this welfare program does not substantially inhibit success and self-sufficiency among youth.
Recent growth in the number of Disability Insurance claimants has led to calls for substantial scaling back of the program. We evaluate the incentive cost of the DI program against its insurance value to those in need. The main failure of the program is the number of severely work limited who do not receive insurance: the program is badly targeted.