Social well-being inequality in Africa

ABSTRACT

In this paper, we construct a composite social well-being index to investigate disparities between 30 African countries. We do this because previous inequality studies relied on income measures; however, when it comes to Africa, specifically, income is not an adequate measure to capture well-being. Furthermore, we apply the recentered influence function (RIF) method to regress the variance of social well-being on likely influencing factors. Lastly, we use the Blinder–Oaxaca decomposition technique to investigate the gap between countries with higher, and those with lower levels of social well-being. The results indicate that there are high levels of inequality; however, the inequality in social well-being is less stark than in income. Factors that are significantly related to inequality are employment, gender equality, exports, CO₂ emissions, population density, public protests, capital investment, and internet access. The gap that exists between higher and lower social well-being countries is mainly due to the endowment effect.

KEYWORDS:

• Composite index
• social well-being
• inequality
• Africa
• decomposition

JEL CLASSIFICATION CODES:

• C33
• I31
• O18
• O55
• R11

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1 Happiness or life satisfaction are important subjective measures of well-being, but given that many African countries only have access to objective indicators, we focus on objective indicators so that our index could help formulate future policymaking.

2 We define well-being as those aspects of life that society collectively agrees are important for a person’s quality of life and welfare.

3 Also see Arellano and Bover (1995) and Tabachnick and Fidell (2007).

4 For a discussion of RIF regressions, see Firpo et al. (2009) and for applications, see Kollamparambil (2020) and Becchetti et al. (2014).

5 https://data.worldbank.org/

6 http://data.un.org/

7 https://www.afdb.org/en/knowledge/statistics/africa-information-highway-aih/

8 The data sourced by Global Economy includes, but is not limited to the following authorities; the World Bank, the United Nations, the International Monetary Fund, the U.S. Energy Information Administration, UNESCO, the World Economic Forum, and many others.

9 See table 10 in Appendix C for the driving factors of inequality on the dimension indices included in the SWI.

10 Public protests represent a democratic way of voicing demands. Public protests, are defined as strikes or any type of demonstration with political, economic or social motives, and are tracked on a daily basis via news reports by journalists and press agencies across Africa and verified by AFP and Reuters. Each relevant event is counted and then weighted based on such factors as intensity, duration, number of casualties, etc. This indicator combines 4-value variables (with a scale of 0 to 3: 0: non-occurrence, 1: occurrence but weak intensity, 2: medium intensity and 3: strong intensity)