GROWING INEQUALITIES AND ITS IMPACTS IN SPAIN Ada Ferrer-i-Carbonell Xavier Ramos Mónica Oviedo (UAB) Country Report for Spain April, 2013 GINI Country Report Spain GINI Country Report Spain Table of Contents Executive Summary .................................................................................................................................. 1 1. Introduction .......................................................................................................................................... 6 2. The nature of inequality and its development over time ..................................................................13 2.1 Has inequality grown? ..................................................................................................................13 2.1.1 Household income inequality ..................................................................................... 13 2.1.2. Wealth and debt inequality ....................................................................................... 20 2.1.3 Labour market inequality ........................................................................................... 21 2.1.4 Educational inequality ................................................................................................ 35 2.2 Whom has it affected? .................................................................................................................40 2.3 Interdependence between various inequalities ..........................................................................45 2.4 Why has inequality decreased? (though it is bound to increase in these next years) .................46 2.5 Conclusions: The ‘national story’ of evolving inequality drivers ..................................................49 3. The social impacts of inequality .........................................................................................................52 3.1 Introduction ..................................................................................................................................52 3.2 Material deprivation .....................................................................................................................53 3.3 Cumulative disadvantage and multidimensional measures of poverty and social exclusion ......59 3.4 Indicators of social Cohesion ........................................................................................................61 3.5 Family formation and breakdown, lone parenthood, fertility .....................................................63 3.6 Health inequalities ........................................................................................................................68 3.7 Housing tenure .............................................................................................................................77 3.8 Crime and punishment .................................................................................................................79 3.9 Subjective measures of well-being, satisfaction, “happiness” .....................................................82 3.10 Intergenerational mobility for education and occupation .........................................................82 3.11 Conclusions: Appraisal of the interdependence and the ‘national story’ of inequality drivers and their social impacts......................................................................................................................85 4. Political and Cultural Impacts .............................................................................................................88 4.1 Introduction ..................................................................................................................................88 4.2 Political and Civic Participation ....................................................................................................89 4.3 Trust in others and in institutions ................................................................................................95 4.4 Political values and legitimacy ......................................................................................................99 4.5 Values about social policy and welfare state .............................................................................106 4.6 Conclusions .................................................................................................................................110 5. Effectiveess of policies in combating inequality ..............................................................................112 5.1 Introduction ................................................................................................................................112 GINI Country Report Spain 5.2 Labour income ............................................................................................................................112 5.3 Taxation ......................................................................................................................................121 5.4 Social expenditures ....................................................................................................................125 5.5 Education ....................................................................................................................................133 5.6 Conclusions: Appraisal of the `national story´of policies affecting inequality, intended or unintended .......................................................................................................................................141 References ............................................................................................................................................143 GINI Country Report Spain List of Tables Spanish Long Table: Changes on the GINI and other relevant variables ................................................ 3 Table 4.1. Trade Union Membership by Income Level - Share of employees - .................................... 93 Table 4.2. Membership of civic organisations, political parties and trade unions by gender .............. 94 Table 4.3. Evolution of Ideological self-positioning Percentage of respondents aged 18 and over ... 100 Table 4.4. Mean of self-position in political scale by income level ..................................................... 102 Table 4.5. Attitudes toward immigration by Income level Don't like immigrants/foreign workers as neighbours ...................................................................................................................... 105 Table 4.6. Government versus individual responsibility for meeting people’s needs. Share of respondents by income level .......................................................................................... 108 Table 4.7. Why do people live in need: laziness or lack of willpower ................................................. 109 GINI Country Report Spain List of Figures Figure 1.1 GDP annual growth .............................................................................................................. 11 Figure 2.1. After-tax after-transfers income inequality trends. Effect of equivalence scale. ............... 15 Figure 2.2. Before and after-tax after-transfers income inequality trends. Effect of taxes .................. 16 Figure 2.3. After-tax after-transfers income inequality trends. Effect of imputed rents...................... 16 Figure 2.4. Top and bottom after-tax after-transfers income. Effect of equivalence scale. ................. 17 Figure 2.5. Quantile ratios for after-tax after-transfers. Effect of equivalence scale. .......................... 18 Figure 2.6. Consumption in non-durables inequality trends. Effect of equivalence scale. ................... 19 Figure 2.8. Earnings and income inequality .......................................................................................... 23 Figure 2.9. Temporary employment ..................................................................................................... 24 Figure 2.10. Share of temporary employees ......................................................................................... 25 Figure 2.11 Share of temporary employees by age groups .................................................................. 25 Figure 2.12 Activity and employment rate ............................................................................................ 27 Figure 2.13 Activity and employment rate by education level ............................................................. 28 Figure 2.14 Unemployment rate ........................................................................................................... 31 Figure 2.15 Unemployment rate by education level ............................................................................. 32 Figure 2.16 Unemployment rate by country of birth ............................................................................ 33 Figure 2.17. Unemployment rates by age ............................................................................................. 34 Figure 2.18. Jobless Households ........................................................................................................... 35 Figure 2.19. Average years of education over birth cohorts ................................................................. 37 Figure 2.20. Educational attainment over birth cohort ........................................................................ 38 Figure 2.21. Inequality