Documents income distribution 1 081 results

"Over the past half century, democracies around the globe have become more unequal, while in the past quarter century, democracy in many countries has frayed. It turns out that these two trends are related: the more unequal a country's distribution of income, the more likely its democracy is to erode. Therefore, policies that reduce income gaps are not only important on economic and moral grounds; they are also an invest ment in the resilience of global demo.."

"Southern European welfare states have historically been characterised by the absence of national safety nets. However, these countries have witnessed a succession of policy reforms over the past three decades. In 2020, the Spanish Parliament unanimously approved the ‘Ingreso Mínimo Vital' to finally cease being the only European country without a minimum income scheme at the national level. This article investigates the political and institutional mechanisms that enabled this policy reform, which was particularly unexpected due to the fragmentation of the party system along both ideological and territorial dimensions. To solve this puzzle, I employ the ‘explaining-outcome' process tracing method and rely on qualitative data from official documents, party manifestos and parliamentary interventions spanning from 2015 to 2020. In addition, I build on ten expert interviews with relevant actors directly involved in the reform, conducted between 2022 and 2024. Findings illustrate that inclusive path departure was possible through two political stages. First, left-wing party competition and strong socio-political demand (2014–2020) allowed for the introduction of the scheme into the political agenda. Second, territorial politics and the external shock of the coronavirus disease 2019 (COVID-19) pandemic ultimately contributed to mitigating expected political cleavages during the parliamentary process."


This is an Open Access article, distributed under the terms of the Creative Commons Attribution licence (https://creativecommons.org/licenses/by/4.0/), which permits unrestricted re-use, distribution and reproduction, provided the original article is properly cited.

"What are the grand dynamics that drive the accumulation and distribution of capital? Questions about the long-term evolution of inequality, the concentration of wealth, and the prospects for economic growth lie at the heart of political economy. But satisfactory answers have been hard to find for lack of adequate data and clear guiding theories. In Capital in the Twenty-First Century, Thomas Piketty analyzes a unique collection of data from twenty countries, ranging as far back as the eighteenth century, to uncover key economic and social patterns. His findings will transform debate and set the agenda for the next generation of thought about wealth and inequality.
Piketty shows that modern economic growth and the diffusion of knowledge have allowed us to avoid inequalities on the apocalyptic scale predicted by Karl Marx. But we have not modified the deep structures of capital and inequality as much as we thought in the optimistic decades following World War II. The main driver of inequality--the tendency of returns on capital to exceed the rate of economic growth--today threatens to generate extreme inequalities that stir discontent and undermine democratic values. But economic trends are not acts of God. Political action has curbed dangerous inequalities in the past, Piketty says, and may do so again."

"There is a widespread belief that the COVID-19 pandemic has increased global income inequality, reducing per capita incomes by more in poor countries than in rich. This supposition is reasonable but false. Rich countries have experienced more deaths per head than have poor countries; their better health systems, higher incomes, more capable governments and better preparedness notwithstanding. The US did worse than some rich countries, but better than several others. Countries with more deaths saw larger declines in income. There was thus not only no trade-off between lives and income; fewer deaths meant more income. As a result, per capita incomes fell by more in higher-income countries. Country by country, international income inequality decreased. When countries are weighted by population, international income inequality increased, not because the poorest countries diverged from the richest countries, but because China—no longer a poor country—had few deaths and positive economic growth, pulling it away from poor countries. That these findings are a result of the pandemic is supported by comparing global inequality using IMF forecasts in October 2019 and October 2020."

"GDP contractions are typically associated with within-country income inequality increases. While official income inequality data for 2020 will not be available for about two years, the already available employment data for 2020 shows that the difference between highly-educated and low-educated people in terms of job losses is correlated with the economic shock from the COVID-19 pandemic, suggesting that the depth of the economic recession is related to the increase in within-country income inequality in 2020. Scenarios based on historical patterns of recessions and within-country income inequality increases suggest relatively small increases in global income inequality in 2020.

Factors mitigating global inequality increases in 2020 include larger GDP per-capita declines in richer advanced countries than in poorer emerging and developing countries, and the positive GDP growth of China, which suggests that within-country inequality in the world's most populous country might have not changed much in 2020. In contrast, it is quite likely there was a significant increase in European Union income inequality in 2020, partly reversing the decline during the previous decades."

"This paper provides evidence on the impact of major epidemics from the past two decades on income distribution. The pandemics in our sample, even though much smaller in scale than COVID-19, have led to increases in the Gini coefficient, raised the income share of higher-income deciles, and lowered the employment-to-population ratio for those with basic education compared to those with higher education. We provide some evidence that the distributional consequences from the current pandemic may be larger than those flowing from the historical pandemics in our sample, and larger than those following typical recessions and financial crises."

"COVID-19 has had a disruptive economic impact in 2020, but how long its impact will persist remains unclear. We offer a prognosis based on an analysis of the effects of five previous major epidemics in this century. We find that these pandemics led to significant and persistent reductions in disposable income, along with increases in unemployment, income inequality and public debt-to-GDP ratios. Energy use and CO2 emissions dropped, but mostly because of the persistent decline in the level of economic activity rather than structural changes in the energy sector. Applying our empirical estimates to project the impact of COVID-19, we foresee significant scarring in economic performance and income distribution through 2025, which be associated with an increase in poverty of about 75 million people. Policy responses more effective than those in the past would be required to forestall these outcomes."

"The central questions and main contextual background explored by this year's issue of Benchmarking are, at their core, fairly straightforward. Europe is at a crossroads, painfully navigating four transitions at once: a (perhaps less than obvious) economic policy transition best exemplified by the debates surrounding the EU economic governance framework (COM(2022) 583 final); a geopolitical transition, increasingly shaped by the ‘open strategic autonomy' debate (Akgüç 2021) and, of course, by the Russian war of aggression on Ukraine; and the two more readily acknowledged green and digital transitions. It is, however, becoming increasingly clear, as explored in greater detail in the following chapters, that these four transitions imply important trade-offs and have significant ramifications for the social dimension of the European project and for the livelihoods of European workers. These consequences are currently being ignored by the principal institutional actors that are shaping them and that, at times, have conflicting priorities.

The current inability on the part of governments and policy-makers, at a national and supranational level, to resolve the tensions inherent to these transitions is a major factor in determining what the following pages of this issue refer to as a ‘polycrisis'. We understand the current conjuncture as a ‘polycrisis' due to the presence of a series of multiple, separate crises happening simultaneously (e.g. a climate crisis, a cost-of-living crisis, a geopolitical crisis, etc.), due to the way in which these separate crises interact with each other (for instance the energy crisis and the climate crisis), and due to the extent to which they thus amplify each other's effects, in particular social and economic effects (the extent to which strained supply chains and externally driven inflationary pressures tend to magnify the shortcomings of current fiscal policies, for instance, as noted in the opening chapter). There is also a growing perception that resolving any of these crises in isolation may be a particularly arduous task and that cumulative responses must be identified.

This polycrisis is intimately linked to the inability of the ruling class to engage with what we identify here as the missing transition: the social transition. This issue of Benchmarking Working Europe engages critically with these four transitions and their effects and posits that only a transformative and ambitious social transition can break the current cycle of crisis after crisis and instead institutionalise what the issue refers to as ‘sustainable resilience'.

The four transitions – and the missing one
We are arguably witnessing four major discernible and disruptive transition processes that are shaking the kaleidoscope of the European project as it is currently still enshrined in the (fragile) constitutional consensus embodied by the Lisbon Treaty. The rather more obvious (but no less challenging) processes are the green and technological transitions. Yet, it is arguable that, most visibly since the suspension of parts of the Stability and Growth Pact, we have also been experiencing an economic policy (including a monetary policy) transition and – in connection with the supply chain shortages caused by Covid‑19 and its aftermath, and more markedly since the Russian invasion of Ukraine – a geopolitical transition linked to the developing concept of ‘open strategic autonomy'"

"Household surveys suffer from persistent and growing underreporting. We propose a novel procedure to adjust reported survey incomes for underreporting by estimating a model of misreporting whose main parameter of interest is the elasticity of regional national accounts income to regional survey income, which is closely related to the elas- ticity of underreporting with respect to income. We find this elasticity to be substantial but roughly constant over time, implying a large but relatively constant correction to survey-derived inequality estimates. Underreporting of income by the bottom 50% of the world income distribution has become particularly important in recent decades. We reconfirm the findings of the literature that global poverty and inequality have declined dramatically between 1980 and 2019. Finally, we find that within-country inequality is falling on average, and has been largely constant since the 1990s."

"There has not been much progress on the poverty front in Europe over recent decades, at least if we take it as a relative phenomenon in affluent societies. There is a lot of pessimism about the possibility of making any real progress at all. Some argue that adequate poverty relief is simply too expensive or that it would put too much of a redistributive burden on the electorally powerful, making it politically difficult, if not infeasible. Another prominent argument is that wage floors and thus out-of-work benefit levels are inexorably under pressure, making poverty relief both harder to achieve and more expensive in budgetary terms. This paper sets out these accounts and focuses on what has been happening to statutory, absolute and effective wage floors in Europe over the past decades. We ask whether progress on the poverty front through pushing up wage floors and subsequently out-of-work benefits is a realistic prospect. We see reasons for optimism."