• The IEB devotes its latest IEB Report to analysing inequality figures and the corrective policies applied by government
  

The most recent economic crisis had a strong generational component. This is one of the conclusions drawn in the latest edition of the IEB Report – published by the Barcelona Institute of Economics (IEB) under the title “Inequality: measurement and policies” – which focuses on analysing inequality. In his contribution, José Fernández-Albertos, a researcher with the Institute of Public Goods and Policies and the Spanish National Research Council (CSIC), shows that in the 2007-2013 period, poverty was “rejuvenated”: “Among those aged 16-29 [the poverty rate] increased from 18.1 to 28.6%.” In contrast, “the poverty rate among those aged over 65 fell from 25.5 to 11.4%.”

In his article “The Economic Crisis and Inequality in Spain: A Political Reflection”, the researcher refutes the idea that the economic downturn affected the middle class more than other groups: “In distributive terms, […] it was a crisis that punished above all the poorest classes, as they saw the income gap between themselves and the middle-income groups widen,” argues Fernández-Albertos. He believes higher unemployment among the “youngest, least qualified, and poorest sector of the population,” was the main cause of the increase in inequality during this period.

The author makes the case that corrective policies were aimed at redistributing public spending through unemployment benefits, but that their effect was not sufficient to reduce inequality, in part because these benefits did not reach those most affected by the economic downturn – namely, young families, children and precarious workers.

Asia changes the map of inequality
Professor Giovanni Vecchi of the University of Rome Tor Vergata contributes to the IEB Report, with an article entitled “Global Inequality: Historical Trends”, in which he shows that there are two key moments in the evolution of inequality between countries. The first was the entire 19th century, a period coinciding with the Industrial Revolution, which multiplied the income gap between the countries that participated in it and those that did not. The second was in the late 1980s, coinciding with the rapid growth of the Asian economies, which led to a reduction in global inequality indices.

“In 9 out of 10 cases, the ‘winners’ (that is, those who have gained the most in relative terms) are the poor and middle income people in the emerging Asian economies […]. A second group of winners has been the global top 1 percent, most of whom are from the United States, Western Europe, Japan, and Oceania. The least successful families are almost invariably from African countries, whose global position has been shifting backward, together with East Europe,” Vecchi explains in his analysis.

Education: the origin of equality
In an article entitled “Inequality and Mobility in Developed Countries: Measurement and Policies”, Professor Andreas Peichl of the University of Mannheim says that “early childhood interventions have important implications for later life-outcomes […]. And indeed, countries such as the Nordic ones, with high coverage rates of young-age childcare facilities and inclusive classrooms, perform best in terms of inequality and mobility, whereas the segregated system in Anglo-Saxon countries seems to perform worst.”

Local policies for a global problem
UB researcher Sara Torregrosa-Hetland also contributes to the IEB Report with an article entitled “Inequality: Unresolved Business”, in which she stresses that inequality is a global phenomenon that is only being addressed by applying local measures: “Inequality is to a great extent global, and is generated in a context of intense commercial, financial and migratory exchanges between different parts of the planet. The forces of globalization occupy a prominent place among the explanations for present-day inequality. But […] the corrective measures of governments, are usually (necessarily) limited to their national ambit, the ambit in which they have the capacity to act.” According to Torregrosa-Hetland, the way to strengthen redistributive policies is to intensify international cooperation in order to increase the ability of governments to levy taxes on capital or on high incomes.