Inequality Matters: Report of the World Social Situation

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Inequality Matters: Report of the World Social Situation ST/ESA/345 Department of Economic and Social Affairs Inequality Matters Report of the World Social Situation 2013 United Nations New York, 2013 Department of Economic and Social Aff airs The Department of Economic and Social Affairs of the United Nations Secretariat is a vital interface between global policies in the economic, social and environmental spheres and national action. The Department works in three main interlinked areas: (i) it compiles, generates and analyses a wide range of economic, social and environmental data and information on which States Members of the United Nations draw to review common problems and to take stock of policy options; (ii) it facilitates the negotiations of Member States in many intergovernmental bodies on joint courses of action to address ongoing or emerging global challenges; and (iii) it advises interested Governments on the ways and means of translating policy frameworks developed in United Nations conferences and summits into programmes at the country level and, through technical assistance, helps build national capacities. Note The designations employed and the presentation of the material in the present publication do not imply the expression of any opinion whatsoever on the part of the Secretariat of the United Nations concerning the legal status of any country or territory or of its authorities, or concerning the delimitations of its frontiers. The term “country” as used in the text of this report also refers, as appropriate, to territories or areas. The designations of country groups in the text and the tables are intended solely for statistical or analytical convenience and do not necessarily express a judgement about the stage reached by a particular country or area in the development process. Mention of the names of fi rms and commercial products does not imply the endorsement of the United Nations. Symbols of United Nations documents are composed of capital letters combined with fi gures. ST/ESA/345 United Nations publication Sales No. 13.IV.2 ISBN 978-92-1-130322-3 eISBN 978-92-1-056503-5 Copyright © United Nations, 2013 All rights reserved Preface As the international community shapes its vision for a post-2015 global development agenda, worsening inequalities across and within many countries have been an important part of the discussions. There is a growing recognition among stakeholders that economic growth is not suffi cient to sustainably reduce poverty if it is not inclusive. When world leaders adopted the Millennium Declaration in 2000, they pledged to create a more equitable world. Yet, in many countries, the ladder of opportunity has become much harder to climb. Large disparities in access to health and education services, land and other productive assets between the richest and the poorest households persist. Wealth inequalities are inherited across generations and are present across locations, trapping large pockets of society in poverty and exclusion. Across the globe, people living in poverty and vulnerable social groups have been hit particularly hard by the global fi nancial and economic crisis and its aftermath, adding urgency to the need to address inequalities and their consequences. There is growing global consensus on the need to bridge the divide between the haves and the have-nots. As underscored in the outcome document of the United Nations Conference on Sustainable Development (Rio+20), fi nding ways to effectively reduce inequality will require a transformative change and an inclusive approach to the three dimensions of sustainable development – economic, social and environmental. Properly balanced social, economic and environmental policies and institutions can help reduce inequalities when they ensure equality of opportunity, foster job creation and ensure access to adequate social protection for all. Much can be learnt from those countries that managed to reduce inequality even under an uncertain and volatile global environment. The international community can play a role in providing support to policies that help reduce inequality. Eight years after the 2005 issue of the Report on the World Social Situation, which warned the world of an inequality predicament, this Report on the World Social Situation 2013: Inequality Matters brings renewed attention to inequality. The Report places special focus on the impacts of inequality and highlights policies that have been effective at reducing inequality and have helped improve the situation of disadvantaged and marginalized social groups. The Report illustrates that growing inequalities can be arrested by integrated policies that are universal in principle while paying particular attention to the needs of disadvantaged and marginalized populations. It reminds world leaders that, in addressing inequalities, policy matters. The Report shows that inequality does not affect only the poor, but can be detrimental to growth, stability and well-being in general. It aims to provide effective guidance on striking the necessary macroeconomic and social policy balance for achieving sustainable development and in doing so, also seeks to provide practical inputs to the ongoing multi-stakeholder consultations to elaborate the post-2015 global development agenda. Wu Hongbo Under-Secretary-General for Economic and Social Affairs Acknowledgements The Report on the World Social Situation, prepared biennially, is the fl agship publication on major social development issues of the Department of Economic and Social Affairs of the United Nations Secretariat. Wenyan Yang led the team from the Division for Social Policy and Development (DSPD) that prepared the present issue of the Report. The core team at the Division included Lisa Ainbinder, Sarangerel Erdembileg, Astrid Hurley, Felice Llamas, Marta Roig, Amson Sibanda and Makiko Tagashira. Kevin Chua, a consultant, and Leena Kemppainen, Lisa Morrison, Julie Pewitt, Hantamalala Rafalimanana and Simone Wilson, who have moved to other offi ces, also contributed to early drafts. Yu Jia, Pytrik Oosterhof and Josiane Toundzi joined the team at a later stage. Bibi Sherifa Khan and Sylvie Pailler, also of DSPD, provided valuable assistance. Tessa Too-Kong edited the Report. Input to the Report was also received from an independent expert, Jayati Ghosh. Preparation for the Report on the World Social Situation 2013 started with overall guidance from Jomo Kwame Sundaram, then Assistant Secretary-General for Economic Development. Finalization of the Report benefi ted from valuable guidance of Assistant Secretary-General for Economic Development Shamshad Akhtar and DSPD Director Daniela Bas. Mariangela Parra-Lancourt, Special Assistant to ASG Akhtar, provided constructive feedback and suggestions. The Report has also benefi ted from positive feedback from colleagues within and outside the Department of Economic and Social Affairs. We are grateful for all who have contributed. 10 Inequality Matters Contents 11 Contents Page Preface 5 Explanatory notes 14 Overview 19 I. Recent trends in economic inequality 23 Trends in global economic inequality 23 Recent patterns of inequality within countries 27 - Trends and patterns in income inequality 27 - Other dimensions of economic inequality 31 - Growth and inequality: policies matter 34 - Th e power of redistribution 35 Conclusion 37 Annex to Chapter 1: 38 Data and indicators of economic inequality II. Inequality in key aspects of well-being 41 Health inequalities: Life expectancy at birth, child mortality and nutrition 41 Inequalities in education 46 Spatial inequalities 54 - Disparities between urban and rural areas 54 - An enduring rural-urban divide? 56 - Disparities within urban areas 57 Conclusion 59 12 Inequality Matters III. The impact of inequality 61 Inequality and economic growth 61 Inequality and poverty 64 Inequality and social mobility 66 Social and political cohesion, social tolerance of inequality 68 Conclusion 71 IV. Identi ty and inequality: Focus on social groups 73 Inequalities faced by youth 74 - Youth and inequalities in the labour market 75 - Health risks borne by youth 78 Inequalities faced by older persons 79 - Older persons and poverty 79 - Employment and health inequalities faced by older persons 82 Inequalities faced by persons with disabilities 83 - Persons with disabilities and poverty 84 - Persons with disabilities face educational, employment 84 and health inequalities Inequalities faced by indigenous peoples 87 - Indigenous peoples and poverty, educational, employment 87 and health inequalities - Indigenous peoples, inequalities in land rights and 90 environmental challenges Inequalities faced by migrants 91 - Inequalities and trade-off s: migrants and 91 those who stay behind - Disparities between migrants and natives of the regions 93 or countries of destination Conclusion 94 Contents 13 V. What can be done to tackle inequaliti es? 97 Taking stock 97 Addressing inequality 98 - Universalism in the provision of social services 98 - Reducing social exclusion and intergenerational disadvantage 99 - Social protection 101 - Investment in education and strengthening 102 labour market institutions - Fiscal and monetary policies to reduce inequality 103 - Creating more and better-paying jobs 105 - Reducing asset inequalities 107 Th e international framework and the post-2015 global 107 development agenda Conclusion 110 Bibiliography 113 Figures Figure I.1 International income inequality, 1980-2010 24 Figure I.2 Average income per capita of the top and bottom 10 per cent of the population and of the total population 26 in selected
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