Testing For Convergence in Output and in 'Well-Being' in Industrialized Countries

There is now an extensive empirical literature relating to tests for various forms of convergence between the real per capita outputs of different countries. The evidence from these tests is mixed, and depends upon the type of data used, the countries in question, and the sample period in question. However, very little attention has been paid to the possibility of an associated convergence in "well-being" across countries. Indeed, it is interesting to posit the lack of any connection between convergence in output (income) and convergence in "well-being". In this paper we address this issue in the context of fourteen OECD economies, using various measures of "well-being", and different tests of convergence. The latter include a time-series test recently proposed by Nahar and Inder (2002), and a test based on fuzzy clustering proposed by Giles (2001). Our findings indicate that in general one should not expect convergence in output to be associated with convergence in "well-being".