There are variables other than income _ such as health, educational attainment, happiness, and so on _ that are often used to evaluate living standards in a society. This chapter deals with the measurement of inequality among these non-income variables, which are referred to as social variables. The chapter addresses the strand of research that has focused on the assessment of pure inequality of distributions of social variables, without considering the economic status of individuals. A second strand of research, namely socioeconomic inequality, has tried to relate inequality in social variables with income inequality. Although the measurement of pure inequality with social variables is closely related to the measurement of income inequality, the use of standard income inequality measurement procedures is not straightforward when the social variables are either ordinal or bounded cardinal variables. The chapter is devoted to reviewing results on the measurement of inequality with social variables of these two types.
Casilda Lasso de la Vega
Vulnerability to poverty, interpreted as a forward-looking inclusion of uncertainty in the analysis of poverty, has only recently become part of the literature on poverty. This chapter first introduces different definitions of vulnerability to poverty, and then moves on to more operational aspects of its measurement. Through a review of the existing literature, a series of approaches is presented for the selection of an indicator of vulnerability, the development of methods for forecasting future outcomes and variability of the indicator, and finally the identification of a vulnerability threshold. The chapter concludes with an overview of the covariates used by the literature to assess future poverty status, and presents some final remarks.
Two competing strands exist within the theoretical literature on vulnerability to poverty, each with its own policy implications. Vulnerability may be seen as low expected utility, and thus stress the danger of self-perpetuating poverty, as the poor shy away from risky, yet necessary decisions to escape their hardship. Alternatively, vulnerability is often construed as expected poverty, and provides policy makers with a forward-looking viewpoint that both sheds light on and raises new questions on how best to formulate the targeting of social spending. This chapter provides an overview of the theoretical work underpinning each of these competing views.
Ulf Bernitz, Moa Mårtensson, Lars Oxelheim and Thomas Persson
The introductory chapter provides an overview of the great social challenge that the EU currently faces. The editors raise the question of what can be done to bridge the prosperity gap in Europe. First, they briefly describe the background: the social dimension of European cooperation and its historical development. Second, they identify the new social challenges that the Union faces in the wake of the Great Recession, the ongoing refugee crisis, and the Brexit referendum. Third, an analytical point of departure for examining these challenges is presented, consisting of an interdisciplinary approach that pinpoints a number of overarching problems and possibilities associated with the social dimension of European integration. Fourth and finally, the book’s chapters are introduced, and their key policy recommendations are summarized. The chapter concludes with the argument that much of the EU’s future relevance and ability to stay together depends on its capacity to counteract the prosperity gap and reverse the negative trend that emerged during the crisis.
The Social Challenge Ahead
Edited by Ulf Bernitz, Moa Mårtensson, Lars Oxelheim and Thomas Persson
This chapter analyses the future of national systems of social insurance in the EU. In Europe, social insurance remains a national responsibility, but the EU’s power to promote the internal market and to develop the social rights connected to EU citizenship challenges the autonomy of the member states. The chapter explains and analyses the tensions that arise in this area when different interests contend. Legal developments in this field raise the question of how the member states’ social security systems should be organized in the future, in conjunction with an expansive body of EU law. The author concludes that the models developed for the future should aim to bridge the gaps in social well-being which currently characterize the EU, without altogether eroding the differences between the welfare models of the different member states. In an increasingly globalized world, the EU’s future lies in community and not in national particularity.
This chapter analyses how the tension between fiscal discipline and responsiveness to popular demands contributes to widening the prosperity gap in Europe. On the one hand, the author argues, the countries most affected by the Great Recession still have a pressing need to strengthen their budget balances and to reduce their debt levels. If they fail to improve fiscal discipline, they will remain vulnerable to economic crises in the future. On the other hand, austerity is often met by public resistance. The political consequences of going against the voters’ preferences can be dramatic and pave the way for populist parties. Thus, governments should not only increase their budgetary safety margins during upturns in the business cycle, but also take measures to increase public support for fiscal discipline. This will reduce the tension they experience between fiscal responsibility and electoral responsiveness.
Edited by Ulf Bernitz, Moa Mårtensson, Lars Oxelheim and Thomas Persson
This chapter looks at how the prosperity gap between the member states is affected by the free movement of workers within the EU. One key purpose of free movement is to even out economic imbalances between the member states. The author’s analysis shows that labour mobility within the Union is too limited to make any significant contribution to economic equalization between the member states. However, mobility still has positive effects in terms of the income gain it implies for the migrants themselves and by helping to reduce labour shortages in specific sectors in specific countries. Contrary to common belief, moreover, migrants contribute somewhat more to the public purse than they cost. The author concludes that the Union and its member states should strive to uphold the free movement of labour, although it has never been as questioned as it is today.
Nicholas Charron and Bo Rothstein
This chapter explores the factors that operate at a societal level to build or destroy social trust. The analysis is based on unique data about the quality of public institutions at the regional level within the EU, and the authors test the tenability of four common explanations for variations in social trust: economic inequality, ethnic diversity, the quality of public institutions, and the degree of political participation by citizens. The analysis shows that the quality of public institutions is the strongest factor underlying regional variations in trust within countries. Economic inequality also proves to be a factor to be reckoned with for explaining variations in social trust. By contrast, the degree of ethnic diversity and the extent to which citizens participate politically have less importance for variations in trust. The overall conclusion is that increasing the quality of public institutions should have first priority if our aim is to reduce the prosperity gap between countries and regions in Europe.