Changing Inequalities and Societal Impacts in Rich Countries: Thirty Countries' Experiences

786 Pages·2014·4.36 MB·English

by  Brian Nolan

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CHANGING
INEQUALITIES
AND SOCIETAL
IMPACTS IN RICH
COUNTRIES
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CHANGING
INEQUALITIES
AND SOCIETAL
IMPACTS IN RICH

COUNTRIES

Th irty Countries’ Experiences
Edited by
BRIAN   NOLAN , WIEMER SALVERDA , DANIELE
CHECCHI , IVE   MARX , ABIGAIL McKNIGHT ,
ISTVÁN GYÖRGY TÓTH, AND
HERMAN van de WERFHORST

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Great Clarendon Street, Oxford, ox2 6dp,
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First Edition published in 2014
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Foreword

Income inequalities, with their many causes, including labour market polarization, fi nan-
cial sector deregulation, loopholes in tax systems and weakening of the Welfare State, are
increasingly being viewed as a factor that has contributed to the on-going economic and
social crisis and that makes recovery more diffi cult.
Th e Europe 2020 Strategy addressed this issue by stressing that growth cannot be smart
or sustainable unless it is also inclusive. Th e targets of a 75 per cent employment rate and of
lift ing at least 20 million people from the risk of poverty or social exclusion were intended to
shape the EU’s socio-economic development model precisely towards the vision of a more
inclusive growth.
I have therefore taken a keen interest in the Growing Inequalities’ Impacts project from
its beginning in 2010, and I am pleased to now see its fi nal product coming to fruition.
Th is book off ers a unique comparative analysis across 30 EU and OECD countries cov-
ering economic inequality developments over the last 30 years. Such breadth of coverage,
building on a well-designed analytical approach commonly applied to the individual coun-
try analyses, allows for the identifi cation of common patterns as well as divergences. And
this is precisely what this book does: it takes the reader country by country through a similar
analytical process from long-term patterns of economic inequalities and their determinants,
to their social, political and cultural impacts, to the role of national policies and institutions
in the moderation or amplifi cation of inequalities.
Th e individual country profi les are complemented by summary chapters, which draw
on the rich data available and provide useful policy conclusions. Hence, we obtain confi r-
mation of a general long-term rising trend in income inequalities, albeit with important
country variations or occasional trend reversals. We see for instance how health outcomes
display strong income, educational or social gradients; and how coordinated wage-setting
mechanisms and minimum wages appear to contribute to reducing income inequalities.
Th e Commission has benefi ted from the GINI project to inspire its in-house analytical
work on inequalities and the future of the Welfare State, as summarized in various chapters
of the Employment and Social Developments in Europe reviews for 2011 and 2012. But more
than that, we have drawn on the GINI research in the preparation of key policy initiatives
such as the Employment Package of 2012 and the Social Investment Package of 2013.
Th ere is a clear need for proactive public policy to improve opportunities and transi-
tions at the lower end of the labour market while correcting excesses at the top. Th is need is
well-summarized in the concept of social investment, which should, in our view, guide the
design of twenty-fi rst century Welfare States aiming to support inclusive growth. Taxation
obviously also needs to catch up, and recent moves against tax avoidance on both sides of
the Atlantic off er some renewed hope.
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vi FOREWORD
M uch of the action obviously needs to be taken at national level. I therefore hope that
when implementing labour market, social protection or taxation reforms, governments will
benefi t from the lessons of the GINI analysis as much as possible.
László Andor
European Union Commissioner for Employment, Social Aff airs and Inclusion
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Preface by the Editors

T his volume is the product of a most extensive and fruitful scientifi c collaboration across
countries and disciplines, focused on issues of central importance to modern societies. It
is a core output of the Growing Inequalities’ Impacts—GINI research project, funded by the
European Commission under the Socio-Economic Sciences and Humanities theme of the
Seventh Framework Programme. Th is project has addressed pressing questions about the
evolution of inequalities in income, in wealth, and in educational outcomes and opportuni-
ties; and the social, political and cultural impacts these may have, as well their policy context
and implications. In doing so, it has drawn on the expertise and commitment of over 150
social scientists, drawn from the disciplines of economics, sociology, political science and
public health, and covering a total of 30 countries—25 of the 27 European Union Member
States (the exceptions being Cyprus and Malta), Australia, Canada, Japan, Korea, and the
USA. Th is exceptionally wide span is an essential component and strength of the scientifi c
endeavour. Th is book presents one central element of the product of this collaboration, in
the form of individual country studies presenting an overview of the evidence on the evo-
lution of inequalities and their impacts in the country in question over the last three dec-
ades. Th e other core output, refl ecting both the fi ndings from comparative analysis and the
key messages from the country experiences detailed here, is also being published by Oxford
University Press under the title C hanging Inequalities and Societal Impacts in Rich Countries:
Analytical and Comparative Perspectives.
Th e GINI research project has been structured around six core research partners, with
their teams, in the Amsterdam Institute for Advanced Labour Studies (AIAS) and the
Amsterdam Centre for Inequality Studies (AMCIS), both at the University of Amsterdam,
the College of Human Sciences and Geary Institute at University College Dublin, the
Herman Deleeck Centre for Social Policy at the University of Antwerp, the Work, Training
and Welfare interdisciplinary research centre (WTW) at the University of Milan, the Centre
for Analysis of Social Exclusion (CASE) at the London School of Economics and Political
Science, and TÁRKI Social Research Institute, Budapest. Th ese coordinated the work of
another 20 country teams that were joined later by the Korean team, which volunteered to
participate in the project with the support of the National Research Foundation of Korea
in December 2011. Th e work has generated substantial Country Reports that provide the
background to the chapters of the present volume. Twenty-three individual research asso-
ciates committed themselves to the project from the start, while in the course of the pro-
ject many other experts accepted our invitations to contribute in their fi elds, which have
resulted in 80 GINI Discussion Papers. Th e full listing of contributors (country team mem-
bers and individual experts), their reports and the papers can be found on the website of the
project: <gini-research.org>. As project coordinators and as editors of this volume, we are
extremely grateful to all these participants for their intensive engagement throughout the
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viii PREFACE BY THE EDITORS
project, and owe a particular debt here to the authors of the country chapters presented in
this volume for the spirit in which the enterprise was brought to a successful conclusion.
Th e project has also benefi ted greatly from the input and advice of its Advisory Board,
comprising Professors Tony Atkinson (Nuffi eld College Oxford), Gøsta Esping-Andersen
(Pompeu Fabra University, Barcelona), John Hills (CASE at the LSE), Suzanne Mettler
(Cornell University), Haya Stier (Tel Aviv University), Jane Waldfogel (Columbia University
and LSE), Richard Wilkinson (University of Nottingham), and Marco Mira d’Ercole
(OECD). We are very grateful to them for their thoughtful advice and their involvement in
guiding what has been a particularly complex project, both in terms of structure and range
of challenging topics to be investigated, and the contribution of their own views at the meet-
ings that we have organized.
Th e substantial funding provided by the European Commission’s programmes for
international scientifi c collaboration was an essential underpinning to a multi-year,
multi-country study of this type.1 We have received extremely helpful guidance and sup-
port from Ronan O’Brien and Marie Ramot of the Commission’s Directorate General
for Research and Innovation, and also very helpful input from Georg Fisher, Director for
Analysis, Evaluation, and External Relations, in the Directorate General for Employment,
Social Aff airs and Inclusion.
Finally, we have been in good hands throughout with Oxford University Press, and wish
to express our deep appreciation for the support received from its commissioning editor,
Adam Swallow, from the outset, which has been critically important, as well as to Aimee
Wright and colleagues in shepherding the volume through the production process.
Th e research project on which this book is based has been challenging but highly reward-
ing, and we trust that the broad-ranging fi ndings will deepen understanding, act as a spring-
board for further research, and inform policy in relation to inequality and its impacts,
crucially important for the development of our societies.
Brian Nolan (Dublin), Wiemer Salverda (Amsterdam), Daniele Checchi (Milano), Ive Marx
(Antwerp), Abigail McKnight (London), István György Tóth (Budapest) and Herman G. van
de Werfh orst (Amsterdam).
1 Th e 7th Framework Programme in the fi eld of Socio-Economic Sciences and Humanities awarded
grant No 244592 to the GINI proposal, submitted in January 2009 and very favourably reviewed by
the Commission’s independent and anonymous referees, whom we thank for their support. Th e GINI
project started in February 2010 and concluded in July 2013.
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