Review of Angus Deaton's the Great Escape

Journal of Economic Literature 2015, 53(1), 102–114 http://dx.doi.org/10.1257/jel.53.1.102 A Review of Angus Deaton’s The Great Escape: Health, Wealth, and the Origins of Inequality† David N. Weil* This book explores the relationship between the material standard of living and health, both across countries and over time. Above all, Deaton is interested in the question of whether income growth contributes significantly to better health. His answer is no: saving lives in poor countries is not expensive, and there are many episodes of massive health improvements in the absence of income growth. As an alternative, he argues that the cross-sectional correlation between health and income is induced by variation in institutional quality, while over time, parallel improvements in income and health have been a result of advancing knowledge. (JEL E23, I12, I14, I15, O15, O47) 1. Introduction of GDP per capita, for which we can calcu- late compound growth rates and, with some- obert Lucas famously wrote of eco- what more difficulty, make comparisons Rnomic growth that once you start think- across countries. Another dimension along ing about it, it is hard to think about anything which there has been enormous change over else. But what is economic growth? One time is human health. Reminding oneself of aspect of growth is change in the goods the ubiquity of premature death, suffering, and services that an economy produces. and disability that characterized the lives of Compared to our ancestors, or to most of the previous generations, and that still charac- other residents of our planet, those of us who terizes the lives of many people in develop- live in developed countries today enjoy the ing countries today, is a good way to get some benefits of a much better consumption bas- perspective on the importance of income as ket: big houses, cars, air conditioning, restau- measured in conventional GDP.1 rant meals, and so on. These are the things Whether one includes health improve- that are captured in conventional measures ment as part of “economic growth,” or * Brown University and NBER. 1 A brave soul might even ask how these improvements † Go to http://dx.doi.org/10.1257/jel.53.1.102 to visit the compare in terms of their effect on human welfare. See article page and view author disclosure statement(s). Weil (2014) for a discussion of this literature. 102 Weil: A Review of Angus Deaton’s The Great Escape 103 whether one restricts that term to apply only undergraduates and lay people can eas- to income, is just a matter of labeling. But ily understand, but also enlightening and there is a related substantive question: What challenging to even the most experienced do the material standard of living and health scholar. Deaton takes the reader on a richly have to do with each other? The Great detailed tour through a landscape of historical Escape tells the stories of the enormous narrative, science, data from across the world, improvements in health and income that and scholarly debate. And he is a superb have taken place in the last few centuries, guide: erudite, lucid, humane, and witty. and of the huge gaps that persist today, both between and within countries. At the book’s 2. Health and Wealth core is an examination of the causal relationship between income and health, and par- Improvements in health and economic ticularly the question of whether increasing growth (in the narrow sense of rising income in poor countries is a good way to income) have much in common in terms of bring about health improvement. Deaton’s their timing, geographical origins, spread, answer is, in brief, that income affects and underlying causes. The sustained health outcomes much less than you prob- economic growth that began in Europe with ably think. the Industrial Revolution was preceded by This review focuses on the relationship millennia in which the conditions of life between income and health, but it would hardly changed at all, and in which cross- be a disservice to the potential reader to country differences were relatively modest. give the impression that this is all that the The material standard of living has been book is about. In fact, The Great Escape utterly transformed in the countries that encompasses a far broader range of topics. started growing first, and enormous income Deaton embeds both health and wealth in gaps have opened up between countries. a framework of “well-being,” and discusses From its starting point in northwestern how to define and measure this concept. He Europe, the contagion of economic growth also addresses other measurement prob- spread to other parts of Europe and lems, including international comparisons North America in relatively short order, of income and the construction of poverty and later to Japan and South America. In thresholds. Issues outside the usual domain the post–World War II period, growth of economics, both moral (for example, the has spread further still, with late starters extent of a person’s responsibility to help such as The Republic of Korea and China others in need) and philosophical (how putting on great bursts of speed in which to evaluate the welfare consequences of a they grew at rates far greater than anything larger population) are touched upon, as well. experienced by the early starters. Throughout the book, there is a persistent In the case of health, the pattern was sim- focus on the welfare of those worst off. The ilar. There is little evidence of trend change book’s overarching metaphor, and the source in health prior to the middle of the eigh- of its title, is the idea that humanity’s escape teenth century, unless one goes back to the from material deprivation and premature transition from hunting and gathering to death has been tied up with inequality: at agriculture, at which time things got worse. first, only a few escape, and many are left And while there existed health differences behind. among countries prior to industrialization, All of these topics are woven together in with the tropics being particularly unhealthy, an elegant narrative, written at a level that the gap was small in comparison to what was 104 Journal of Economic Literature, Vol. LIII (March 2015) to follow.2 The same countries that led the advanced countries—but this is something pack in terms of income growth saw health that Deaton spends relatively little time on improve first, and as with income, many in his book, since his concern is more with countries that started their health improve- those not lucky enough to be at the frontier. ments later experienced gains at a speed The most notable relationship between far faster than anything the leaders had income and health is in cross-country data. achieved. This was particularly true during Preston (1975) first plotted and interpreted the “international epidemiological transi- the relationship between income and life tion” in the middle of the twentieth century, expectancy. Deaton begins his analysis by when a number of health technologies were showing a plot of the “Preston curve,” and transferred rapidly from the developed to much of his book is devoted to thinking about the developing world (see Acemoglu and what the curve means. The Preston curve Johnson 2007). certainly fits well. Using data from 2010, the There is also a similarly eerie constancy in correlation between the log of GDP per cap- the trend growth rates of income and health ita and life expectancy is 0.84 when countries in the most advanced countries. As discussed are weighted by population (and only slightly by Jones (2002) and Lucas (2000), among lower if they are not weighted). The relation- others, the rate of growth of output per cap- ship is not far from linear, with a doubling ita over the last 140 years in the United States of GDP per capita being associated with an (the world largest rich country for most of the increase in life expectancy of roughly five period) has been nearly constant, at roughly years. An interesting point is that the fit of 2 percent per year. Similarly, in the analysis the Preston curve has been improving over of Oeppen and Vaupel (2002), life expec- recent decades. Using data for 1980 (and tancy in the “best practice” countries (those the same sample as the previous calcula- with the highest life expectancy in the world) tion), the weighted correlation between the has increased linearly since 1840 at a pace of log of GDP per capita and life expectancy is three months per annum, with no sign of a only 0.52. Almost the entire improvement slowdown. In each case, these steady head- in fit can be attributed to a single country, line results reflect ferment beneath the sur- China, which was an enormous outlier (high face. For life expectancy, the sets of diseases life expectancy relative to income) in 1980, that were being controlled, the means used and has since moved back in line. The cor- to conquer them, and the ages at which death relation between income and life expectancy was being rolled back have changed dramati- is echoed with other measures of health, cally. In the case of income, increased invest- including absence of anemia, fraction of ment rates in human and physical capital, babies that are low birth weight, and years massive structural change, the demographic lost to disability (Weil 2014). transition, and a sea-change in the nature of There is also a significant relationship R&D—what Jones calls a series of “grand between income and health that is observ- traverses”—have netted out to constant able within countries.

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