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Social Cohesion and Social Policy: Does income inequality matter?

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Social Cohesion and Social Policy: Does income inequality matter? Sarah Carpentier Ive Marx Karel Van den Bosch Centre for Social Policy Herman Deleeck – PowerPoint PPT presentation

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Title: Social Cohesion and Social Policy: Does income inequality matter?


1
Social Cohesion and Social Policy Does income
inequality matter?
  • Sarah Carpentier
  • Ive Marx
  • Karel Van den Bosch
  • Centre for Social Policy Herman Deleeck
  • Brussels, May 15th 2008

2
Outline
  1. Social cohesion in policy definitions,
    indicators
  2. Does income inequality matter ?
  3. The production of equality, or the puzzle of
    egalitarianism
  4. Conclusion

3
Social cohesion in policy definitions and
indicators
4
Social cohesion as a goal of social policy
  • By several policy actors
  • Local (e.g. UK)
  • Regional (e.g. Walloon region)
  • National (e.g. Canada)
  • Supranational (e.g. EU, OECD, Council of Europe)

5
Council of Europe (2005)
  • Definition
  • a societys ability to secure the long-term
    well-being of al its members
  • Four central principles
  • Fair and equal access to ressources
  • Individual and collective dignity
  • Autonomy of the individual
  • Participation in community life
  • Social, economic, cultural, political cohesion
    sustainability

6
Council of Europe (2005)
  • Indicators
  • four levels of analysis (from general to
    specific)
  • Main indicators social cohesion trend
  • Indicators of public actions which are
    constituents of well-being (shared
    responsibility)
  • Specific life domains (employment, income,
    housing)
  • Sensitive situations vulnerable groups
  • gt Beyond inequality and poverty measures, but
    remain key indicators

7
OECD (2006)
  • Definition
  • No definition
  • Pathologies inform about a lack of cohesion
  • Central concept social development
  • Fostering social cohesion a policy goal
  • besides of enhancing self-sufficiency, equity
    health
  • Economic and social well-being
  • (and sustainability)

8
OECD (2006)
  • Indicators
  • Aim capturing changes in outcomes that social
    policies try to influence with limited ressources
  • 3 types of indicators
  • Social context
  • Social status (outcomes)
  • Societal response

9
OECD (2006)
  • Indicators
  • Social cohesion indicators
  • social status
  • Overall well-being (life satisfaction)
  • Societal dysfunctions (suicide, work accidents)
  • Social conflict (strikes)
  • Political parcipation (voting) and trust
  • societal response
  • Number of prisoners
  • Main social development indicators employment
    and unemployment, inequality, poverty and
    deprivation

10
EU
  • No explicit definition
  • 2 main conceptualisations,
  • rooted in historically developed policies
  • EU regional cohesion policy
  • EU social cohesion pillar of the Lisbonstrategy

11
EU Regional Social Cohesion Policy
  • Definition
  • Economic, social and territorial cohesion
  • reducing economic and social disparities between
    regions to create an economic space attractive to
    invest and to work in
  • Social cohesion
  • poorly stressed
  • Seen as integration in the labour market
  • Economic and territorial cohesion
  • (and sustainability)

12
EU Regional Social Cohesion Policy
  • Indicators GDP
  • Policy Structural Funds and Cohesion Fund
  • second largest budget item EU
  • 2007-2013 350 billion euro
  • ( 150 billion euro of public/private
    national means)

13
Lisbon strategy social cohesion
  • Lisbon strategy (2000)
  • To become the most competitive and dynamic
    knowledge-based economy in 2010 with
  • A strong economic growth
  • More and better jobs
  • Greater social cohesion
  • Sustainability (2001, Göteborg)
  • economic and social cohesion (and
    sustainability)

14
Lisbon strategy social cohesion
  • No explicit definition of social cohesion
  • Social cohesion European social model
  • No clear concept, assumes (Jepsen Serrano
    Pascual)
  • Dichotomy with US
  • Integration of economy and social policy
  • Covers solidarity embodied by (Jeanotte)
  • Universal social protection system
  • Regulation for market correction
  • Social dialogue
  • OMC social protection and social exclusion
    prevail

15
Lisbon strategy social cohesion
  • Indicators
  • Outcome indicators (in line with subsidiarity
    principle)
  • (also social spending and context indicators are
    asked)
  • 3 level structure
  • 1st level key indicators Commonly agreed
  • 2nd level in-depth indicators
  • 3rd level Nation-specific indicators
  • Consists of
  • Indicators on inequality and (relative) poverty
    very prominent!
  • Indicators about life domains (employment,
    health, education, housing)
  • Breakdowns for vulnerable groups

16
Lisbon strategy social cohesion
  • Policy
  • Reports (in line with subsidiarity)
  • Member states National Strategic Reports on
    Social Protection and Social Inclusion
  • EU Joint Report Social Protection Social
    Inclusion
  • http//ec.europa.eu/employment_social/spsi/
  • the_process_en.htm
  • Aims at coordination through agenda-setting and
    mutual learning

17
Concluding
  • Social cohesion has multiple meanings in policy
    use
  • Differences in breadth of dimensions included
  • Hence, also multiple ways of measuring
  • Although, generally acknowledged as
    multi-dimensional phenomenon, reduction of
    inequality and poverty presents consensus
    dimension ( seen as threats) (cf. Jeanotte)
  • Indicators about poverty and income inequality
    (and to a lesser extent labour market
    participation and unemployment) are prominently
    used

18
2. Does income inequality matter?
19
2. Does income inequality matter?
  • Evidently, policy makers say yes, but why?
  • Income inequality is multi-faceted phenomenon
  • Result (indicator) of inequities (exclusions)
  • Result of factors without normative bearing
  • Cause of bad things (see below)
  • Current income is
  • only (important) part of
  • yet good indicator
  • of wider inequality in economic resources

20
2. Does income inequality matter?
  • Income inequality does not necessarily imply
    relative poverty,
  • but the two are in fact closely related.

21
2. Does income inequality matter?
  • Effects of income inequality on other
    life-domains area of intense research and debate.
  • On the one hand, Burtless and Jencks (2003)
  • the effects of inequality on economic growth,
    health, and equality of opportunity are modest
    and uncertain in rich countries

22
2. Does income inequality matter?
  • On the other hand, Wilkinson (2007)
  • many problems associated with relative
    deprivation are more prevalent in more unequal
    societies this may be true of morbidity and
    mortality, obesity, teenage birth rates, mental
    illness, homicide, low trust, low social capital,
    hostility and racism
  • Some illustrations of this follow

23
2. Does income inequality matter?
  • Income inequality and rate of mental illness

24
2. Does income inequality matter?
  • Income inequality and educational achievement

25
2. Does income inequality matter?
  • Income inequality and imprisonment

26
2. Does income inequality matter?
  • However,
  • Causal mechanisms remain obscure
  • Wilkinson low position breeds stress
  • Relationships disappear (or are reversed) in
    panel-of-countries approach, i.e. no link
    between changes in income inequality and bad
    outcomes.

27
3. The production of equality, or, The
Puzzle of Egalitarianism
28
3. The Puzzle of Egalitarianism
  • How can public policy promote greater equality
    (less inequality, less relative poverty)?
  • Three broad strategies
  • Income redistribution through social insurance or
    social assistance
  • Providing goods services free or at reduced
    cost (health care, education, housing)
  • Investing in market-income generating abilities
    of individuals, esp. children

29
3. The Puzzle of Egalitarianism
  • Despite the Active Welfare State etc. most
    resources go to the 1st (and 2nd strategy).
  • Also, doubts about the effectiveness of the
    Activation Strategy
  • The question is then
  • Does income redistribution reduce inequality?
  • Looking at simple cross-country correlations, the
    question is yes.

30
3. The Puzzle of Egalitarianism
  • high social expenditure implies a low rate of
    relative poverty.

31
3. The Puzzle of Egalitarianism
  • But problem of counterfactual what would have
    been the level of inequality in the absence of
    social expenditure?
  • Not necessarily the same across countries
  • Counterfactual problem has basically no solution
  • Suggestive evidence Inequality in wages is
    negatively related to social expenditure

32
3. The Puzzle of Egalitarianism
  • fewer low paid workers, more social expenditure

33
3. The Puzzle of Egalitarianism
  • Possible reasons for this relationship
  • second-order effects of high benefits and high
    taxes and contributions.
  • high wage dispersion, large market inequalities
    make redistribution difficult
  • (social insurance for the self-employed in
    Belgium)
  • high level of solidariy (social cohesion?),
    embedded in institutions, produces low wage
    dispersion and enables high level of income
    redistribution.

34
3. The Puzzle of Egalitarianism
  • In supranational social cohesion policies
    Inequality (and poverty) are common dimensions in
    defintion and indicators
  • Effect of income inequality on other life domains
    is area of intense research and debate
  • Suggestive evidence that income redistribution
    reduces inequality

35
4. Conclusion
  • Inequality (and poverty) constitute a consensus
    dimension in definitions and indicators used by
    social policy actors
  • Effect of income inequality on other life-domains
    is area of intense research and debate
  • Suggestive evidence that income redistribution
    reduce inequality
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