Changing Inequalities in Rich Countries Changing Inequalities in Rich Countries Analytical and Comparative Perspectives Edited by Wiemer Salverda, Brian Nolan, Daniele Checchi, Ive Marx, Abigail McKnight, István György Tóth, and Herman van de Werfhorst 1 1 Great Clarendon Street, Oxford, OX2 6DP, United Kingdom Oxford University Press is a department of the University of Oxford. It furthers the University’s objective of excellence in research, scholarship, and education by publishing worldwide. Oxford is a registered trade mark of Oxford University Press in the UK and in certain other countries © Oxford University Press 2014 The moral rights of the authors have been asserted First Edition published in 2014 Impression: 1 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, without the prior permission in writing of Oxford University Press, or as expressly permitted by law, by licence or under terms agreed with the appropriate reprographics rights organization. Enquiries concerning reproduction outside the scope of the above should be sent to the Rights Department, Oxford University Press, at the address above You must not circulate this work in any other form and you must impose this same condition on any acquirer Published in the United States of America by Oxford University Press 198 Madison Avenue, New York, NY 10016, United States of America British Library Cataloguing in Publication Data Data available Library of Congress Control Number: 2013955767 ISBN 978–0–19–968743–5 Printed and bound in Great Britain by CPI Group (UK) Ltd, Croydon, CR0 4YY Links to third party websites are provided by Oxford in good faith and for information only. Oxford disclaims any responsibility for the materials contained in any third party website referenced in this work. Preface This volume is the product of an extensive and fruitful scientific collabora- tion 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. This project has addressed pressing questions about the evolu- tion of inequalities in income, wealth, and educational outcomes and oppor- tunities, the social, political, and cultural impacts these may have, and the 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 cover- ing a total of thirty countries—twenty-five of the twenty-seven European Union member states (the exceptions being Cyprus and Malta), Australia, Canada, Japan, Korea, and the USA. This exceptionally wide span is an essential component and strength of the scientific endeavour. The project combined comparative analysis and in-depth country studies of inequality trends, the drivers of those trends, their social and political/cultural impacts, and the policies that affect them. The present volume brings together the key findings from the research project as a whole, highlighting the results of comparative analysis while incorporating lessons from individual coun- tries. The findings of the country case studies, where their individual experi- ences are examined through a common analytical framework, are discussed country by country in a companion volume also being published by Oxford University Press under the title Changing Inequalities and Societal Impacts in Rich Countries: Thirty Countries’ Experiences. The 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 interdiscipli- nary research centre (WTW) at the University of Milan, the Centre for Analysis of Social Exclusion (CASE) at the London School of Economics and Political v Preface Science, and TÁRKI Social Research Institute, Budapest. These coordinated the work of another twenty 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. The work has gen- erated substantial country reports that provide the background to the chap- ters of the companion volume. In addition, twenty-three individual research associates committed themselves to the project from the start, while in the course of the project many other experts accepted our invitations to contrib- ute in their fields. As a result, more than eighty GINI discussion papers have been produced, and these, mostly comparative in nature, are at the core of the present book. The full listing of contributors (country team members and individual experts), their reports and the discussion papers can be found at the website of the project: gini-research.org. As project co-ordinators and as editors of this volume, we are extremely grateful to all these participants for their intensive engagement throughout the project. The project has also benefited greatly from the input and advice of its advi- sory board comprising Professors Tony Atkinson (Nuffield College Oxford), Gøsta Esping-Andersen (Pompeu Fabra University, Barcelona), John Hills (CASE at the LSE), Jonas Pontusson (University of Geneva) 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 contri- bution of their own views at the meetings that we have organized. The substantial funding provided by the European Commission’s pro- grammes for international scientific collaboration was an essential under- pinning to a multi-year, multi-country study of this type.1 We have received extremely helpful guidance and support 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 Affairs, and Inclusion. Finally, we have been in good hands throughout with Oxford University Press, and wish to express our deep appreciation of the support received from its commissioning editor Adam Swallow from the outset, which has been 1 The 7th Framework Programme in the field 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. The GINI project started in February 2010 and concluded in July 2013. vi Preface critically important, as well as to Aimee Wright and colleagues in shepherd- ing the volume through the production process. The research project on which this book is based has been challenging but highly rewarding, and we trust that the broad-ranging findings will deepen understanding, act as a springboard for further research, and inform policy in relation to inequality and its impacts, which is crucially important for the development of our societies. Wiemer Salverda (Amsterdam), Brian Nolan (Dublin), Daniele Checchi (Milan), Ive Marx (Antwerp), Abigail McKnight (London), István György Tóth (Budapest), and Herman van de Werfhorst (Amsterdam) vii Contents List of Figures xi List of Tables xv Notes on Contributors xvii 1. Introduction 1 Wiemer Salverda, Brian Nolan, Daniele Checchi, Ive Marx, Abigail McKnight, István György Tóth, and Herman van de Werfhorst 2. Increasing Economic Inequalities? 15 Francesco Bogliacino and Virginia Maestri 3. Earnings, Employment, and Income Inequality 49 Wiemer Salverda and Christina Haas 4. Wealth Inequality and the Accumulation of Debt 82 Virginia Maestri, Francesco Bogliacino, and Wiemer Salverda 5. Increasing Educational Inequalities? 121 Gabriele Ballarino, Massimiliano Bratti, Antonio Filippin, Carlo Fiorio, Marco Leonardi, and Francesco Scervini 6. The Social Impact of Income Inequality: Poverty, Deprivation, and Social Cohesion 146 Brian Nolan and Christopher T. Whelan 7. Social Impacts: Health, Housing, Intergenerational Mobility 169 Abigail McKnight and Frank Cowell 8. Rising Inequalities: Will Electorates Go for Higher Redistribution? 195 István György Tóth, Dániel Horn, and Márton Medgyesi 9. Inequality, Legitimacy, and the Political System 218 Robert Andersen, Brian Burgoon, and Herman van de Werfhorst ix
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