Income Inequality and Human Wellbeing: An Empirical Analysis Using Atkinson Measure of Inequality

Abstract

This article is an attempt to determine whether India’s experience with economic growth improved or deteriorated human well-being (HWB) over a period of 30 years from 1990–1991 to 2019–2020. The net benefits of increased national income due to increased economic growth may be outweighed by the net cost of income inequality, resulting in a reduction in HWB. Past empirical findings reveal that rising income inequality profoundly dents the level of HWB via social unrest. Therefore, to reduce all of these dysfunctional aspects, we must employ a technique that allows some percentage of income to be relinquished to represent a more equitable share of income among citizens. As a result, we used Atkinson’s inequality measure and calculated adjusted national income (ANI) as an HWB function. The quantum of difference between net national income (NNI) per capita and inequality in ANI per capita assists us with policy interventions.