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What Was All That Growth for? Explaining Chinese Decreasing Well-Being in Times of Economic Growth
Since 1990s its economy has been increasing on average by 9.7% each year. Arguably, economic growth allowed a general improvement of several social, economic and sanitary dimensions of people’s life. However, in the same period people’s satisfaction with their life decreased.
What does explain this outcome? And who are the winners and the losers from economic growth? Finally, if economic growth did not improve the human lot, did it at least reduce well-being inequalities?
Using data from the World Values Survey, this paper identifies the determinants that shaped people’s life satisfaction in China between 1990 and 2007. Results suggest that the erosion of
social capital and social comparisons are the two main factors explaining why economic growth did not turn into higher people’s well-being. Moreover, economic growth resulted in
higher well-being disparities among people: those in the lowest three deciles and the middle-class experienced a significant reduction in well-being, whereas richer people substantially
improved their conditions.