GROWING INEQUALITIES AND THEIR IMPACTS IN BELGIUM Tim Van Rie Ive Marx Country Report for Belgium March, 2013 GINI Country Report Belgium GINI Country Report Belgium Table of contents Executive Summary .................................................................................................................................. 1 1. Introduction ...................................................................................................................................... 5 1.1 A single report on Belgium? ..................................................................................................... 5 1.2 Economic context ........................................................................................................................... 6 1.3 Political context ........................................................................................................................ 7 1.4 Regional disparities ................................................................................................................10 1.5. Immigration .................................................................................................................................11 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 inequality ................................................................................................ 17 2.1.3 Labour market inequality ........................................................................................... 20 2.1.4 Educational inequality ......................................................................................... 28 2.2 Whom has it affected? ...........................................................................................................30 2.3 Interdependence between various inequalities ....................................................................31 2.4 Why has inequality (not) grown? ...........................................................................................32 2.5 Conclusions: The ‘national story’ of evolving inequality drivers ............................................33 3. The Social Impacts of Inequality .....................................................................................................35 3.1 Introduction ............................................................................................................................35 3.2 Patterns and trends in material deprivation ..........................................................................35 3.3 Cumulative disadvantage .............................................................................................................38 3.4 Indicators of social cohesion ..................................................................................................39 3.5. Family formation and breakdown, lone parenthood, women’s fertility ....................................40 3.6 Health inequalities ........................................................................................................................43 3.7 Housing tenure .......................................................................................................................53 3.8 Violence, crime and punishment............................................................................................55 3.9 Subjective measures of well-being, satisfaction, “happiness” ...............................................58 3.10 Intergenerational mobility for education and occupation .....................................................58 3.11 Conclusions .............................................................................................................................61 4. Political and Cultural Impacts .........................................................................................................63 4.1 Introduction ............................................................................................................................63 4.2 Political and civic participation ...............................................................................................63 4.3 Trust in institutions and in others ..........................................................................................66 4.4 Political values and legitimacy ................................................................................................69 GINI Country Report Belgium 4.5 Values about social policy and welfare state .........................................................................72 4.6 Conclusions .............................................................................................................................75 5. The Effectiveness of Policies in Combating Inequality ...................................................................79 5.1 Introduction ............................................................................................................................79 5.2 Labour income ........................................................................................................................80 5.3. Taxation .......................................................................................................................................82 5.4 Social expenditure ..................................................................................................................84 5.5 Education ................................................................................................................................94 5.6 Conclusion ..............................................................................................................................97 Annex 1: Income surveys in Belgium ....................................................................................................101 Annex 2: Descriptives of population ....................................................................................................103 Annex 3: ISCO Codes ............................................................................................................................104 References ............................................................................................................................................105 GINI Country Report Belgium List of Tables Table 1.1: Sector shares of value added and employment, Belgium, 1980 and 2009 ............................ 7 Table 1.2. Socio-economic profile of the Belgian regions, late 2000s .................................................. 10 Table 1.3. Regional differences in benefit receipt, Belgium 1985-2008 ............................................... 11 Table 2.1. Equivalent income and inequality, Belgium 1985-2009 ....................................................... 14 Table 2.2. Share of the population in a household with consumer credit and/or mortgage, 2003 ..... 19 Table 2.3. Structure of consumption expenditure by income quintile (COICOP level 2) (percent), Belgium, 2005 ...................................................................................................................... 20 Table 2.4. Socio-economic characteristics of truants in Flanders in secondary education, 2009- 2010 ..................................................................................................................................... 29 Table 2.5. Average scores for 15-year olds on PISA test (standard error between brackets), 2009 .... 29 Table 2.6. Ratio of Flemish to Walloon median equivalised disposable household income by age category ............................................................................................................................... 31 Table 3.1. Population at-risk-of-poverty or social exclusion, by dimension, 2009 ............................... 39 Table 3.2. Perceived social exclusion, Belgium, 2007 ........................................................................... 40 Table 3.3. Household structure (% population, in private households) in Belgium, 1981-2001 .......... 41 Table 3.4. Life expectancy at age 25 by educational level and sex, 1991 and 2001 ............................. 45 Table 3.5. Healthy life expectancy at age 25, by educational level and sex, 1997 and 2004 ............... 45 Table 3.6. Home ownership (share of population living in households owning the home), 1981- 2009 ..................................................................................................................................... 53 Table 3.7. Tenure status of households and individuals in Belgium and regions, 2009 ....................... 53 Table 3.8. Victimization in the year preceding the survey (percentage victimized once or more), 1989-2005 ........................................................................................................................... 55 Table 3.9. Crimes recorded by the police, Belgium, 2000-2008 ........................................................... 57 Table 4.1. Self-declared interest in politics, 1990-2009 ........................................................................ 65 Table 4.2. Discussing politics with friends, 1981-2009 ......................................................................... 66 Table 4.3. Trust in selected