Increase in Economic Growth does not Necessarily Lead to an Increase Essay

Increase in Economic Growth does not Necessarily Lead to an Increase in Human Well-Being - Essay mannequinThere are many definitions to the term economical growth however, economists agree that economic growth refers to the growth in goods and services that a country produces oer a period of time this growth is measured in gross domestic product (gross domestic product) (La Grandville, 2011, p536). GDP includes the goods and services that a country produces, that is to mean the person-to-person expenditure of the people in the country added to the government expenditure and the net exports, which is the value of exports minus imports (Contanza, Hart, Posner and Talberth, 2009, 3). There have been various concerns by economists of how rise up GDP measures the well- macrocosm of individuals in a country with most of them arguing for differentiation between economic growth and economic well- creation. This paper will therefore try critically the claim that an increase in levels of economic growth does not necessarily translate to increase in the well-being of individuals. The idea of well being of an individual can be either objective or subjective. In the objective well-being, individuals use material goods that are measurable such as buying a new house or car among other material gains. However, economic growth is not usually associated with improved material well being because some of the factors that cause the economic growth also cause negative impacts in the society such as exploitation, environmental degradation or nonequivalent spread of the wealth. GDP as a measure of well being of individuals measure the value of intermediate goods, which are not enjoyed by people instead they are used to produce other goods and services. In addition, the exclusion of military expenditure from GDP since there is no measurable output undermines the improvement in the quality of life that people enjoy due to military operations to secure the boarders of a country h ence reducing criminal activities (Dacci, 2011, 49). The subjective well being of is the state of happiness that is usually brought about by the enjoyment of the material wealth. In most of the instances, the subjective well-being, which is the psychological utility of the good that an individual has, is used to measure the variations in the objective well being of the individual. Research has found out that in some instances even with improves material wealth of a country, the happiness levels do not improve , however this claim has been refuted as in most instances the wealthier a country becomes the happier the residents are as wealth leads to change magnitude levels of expressed happiness (Oswald ,1997, 1815). In addition, the levels of happiness that an increase in material wealth brings are usually attached to the social expectations and aspirations. Therefore even if economic growth increased the material wealth of an individual, the economic standards benchmark will rise, t he individual will therefore remain at the same position or be worse off relative to the new economic standards and expectations which in return does not making him any happier. In addition, the increase in job that is brought about by economic growth does not necessarily lead to increased well being of an individual (Kenny, 1999, 6). Research conducted by the international advertize organisation has showed that over 40% of workers are classified as poor, this happens when the employment increases without accompanying increase in productivity of each worker, it has been confirmed in due east Asian countries such as Vietnam where increased levels of productivity among employees have led to reduction in poverty levels in the country. The idea that economic growth d