The OECD Centre for Opportunity and Equality is a platform for promoting and conducting policy-oriented research on the trends, causes and consequences of inequalities in society and the economy, and a forum to discuss how policies can best address such inequalities. The work of the Centre can be found below.
Inequality and...
Income inequality in OECD countries is at its highest level for the past half century. The average income of the richest 10% of the population is about nine times that of the poorest 10% across the OECD, up from seven times 25 years ago. Only in Turkey, Chile, and Mexico has inequality fallen, but in the latter two countries the incomes of the richest are still more than 25 times those of the poorest. The economic crisis has added urgency to the need to address inequality. Uncertainty and fears of social decline and exclusion have reached the middle classes in many societies. Arresting the trend of rising inequality has become a priority for policy makers in many countries. In emerging economies, such as China and India, a sustained period of strong economic growth has helped lift millions of people out of absolute poverty. But the benefits of growth have not been evenly distributed and high levels of income inequality have risen further. Among the dynamic emerging economies, only Brazil managed to strongly reduce inequality, but the gap between rich and poor is still about five times that in the OECD countries. The OECD analyses trends in inequality and poverty for advanced and emerging economies. It examines the drivers of growing inequalities, such as globalisation, skill-biased technological change and changes in countries’ policy approaches. And it assesses the effectiveness and efficiency of a wide range of policies, including education, labour market and social policies, in tackling poverty and promoting more inclusive growth. KEY PUBLICATIONS OTHER REPORTS |
For more data on inequality, visit the OECD Income Distribution DatabaseOECD'S "COMPARE YOUR INCOME" WEB TOOL |
INEQUALITY AND GENDER
Breaking down barriers to gender equality in education, employment and entrepreneurship would create new sources of economic growth and help make better use of everyone’s skills. Greater educational attainment has accounted for about half of the economic growth in OECD countries in the past 50 years, in large part thanks to an increase in girls reaching higher levels of education and greater gender equality in the number of years spent in school. Companies with a higher proportion of women in top management do better than others. But on average, in OECD countries, women earn 16% less than men, and female top-earners are paid 21% less than their male counterparts. Women occupy less than a fifth of parliamentary seats around the world and their access to top positions in companies is even worse. The impact of pay inequality is dramatic over a woman’s lifetime. Having worked less in formal employment, but having carried out much more unpaid work at home, many women will retire on lower pensions and see out their final years in poverty. Living an average of nearly 6 years longer than men, women over 65 are today more than one and a half times more likely to live in poverty than men in the same age bracket. |
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INEQUALITY AND TAX
While increasing inequality presents key challenges for all policymakers, tax policy has a particularly important role in addressing inequality and boosting economic growth. As pre-tax income inequality increases, the role of tax policy will only grow more important. Maintaining the overall progressivity of the tax code is a key priority in this regard. Moreover, countries are increasingly coming together to co-operate on international tax issues, to reduce the ability of high-wealth individuals and companies to shift assets and income offshore to avoid taxation. A wide variety of other policies are also on the agenda for many OECD countries. Examples of policies that countries could consider implementing to tackle inequality include:
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Progress in health status and life expectancy in OECD countries and in emerging economies has been remarkable, but not even. Large inequalities exist not only across countries, but also between population groups within each country. Inequalities in health status are due to many factors, including differences in living and working conditions and in behavioural factors, but also in access to and quality of health care. Despite significant progress in most countries, access to quality health care varies across the socio-demographic groups, including by sex, age, geographic area and for financial and non-financial reasons. Greater emphasis on public health and disease prevention, along with improved access to health services, can improve the health status and life expectancy of disadvantaged groups. Most OECD countries have endorsed, as major policy objectives, the reduction of inequalities in health status and the principle of equal access to health care based on need. The OECD regularly monitors to what extent policies to reduce health inequality achieve their objectives and assesses the potential benefits and costs of various policy interventions.
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INEQUALITY AND EDUCATION |
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Inequalities which surface in the job-market are often entrenched during education, which puts those at the bottom at a serious disadvantage. Poorer students struggle to compete with their wealthier classmates and go on to lower levels of educational attainment, smaller salaries, and most strikingly, shorter lives. Data from 15 OECD countries shows that, at age 30, people with the highest levels of education can expect to live, on average, six years longer than their poorly educated peers. Investing in education and training will pay long-term dividends for the economy, for individual well-being, and for the overall prosperity of our societies. Reaching excellence through equity is possible. For that, we need to develop more ambitious education and skills policies. Our evidence-based PISA and PIAAC initiatives highlight large inequalities in education and skills. They also demonstrate that there are major potential benefits to equip disadvantaged groups, such as low social-background students and low-skilled workers, to acquire better skills and compete for better-paying jobs. KEY PUBLICATIONS FURTHER READING |
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INEQUALITY AND INNOVATION |
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Innovation and entrepreneurship are major potential sources of growth with strong spillover benefits across the economy. But in the past, innovation policies have generally been assessed in terms of their impact on aggregate income growth. However, these impacts are unlikely to be “neutral” as they might affect individuals and groups differently (“social inclusiveness”). All individuals and businesses are not on an equal footing regarding innovation capacities and access to the corresponding benefits (“industrial inclusiveness”). Moreover, policies aimed at promoting innovation affect the geographic dimensions of industrial and social inequalities and underpin inequalities between urban and rural (“territorial inclusiveness”). As a result, it is essential to consider the social, industrial and territorial implications of innovation policies as well. This is especially important if the changes inherent in the innovation process exacerbate income disparities by creating opportunities primarily for high-skilled workers. Inclusive innovation policies – such as implementing well-designed policies to support young firms, simplify registration procedures for start-ups, and improve access to finance and other essential business services – can help mitigate these costs. |
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Inequality is closely linked to where people live and work. The economic crisis has widened inequalities across regions within countries. The spatial concentration of income inequality has been increasing everywhere. In advanced economies, income inequality is highest within large cities, with large disparities in income from one area of a city to another. In the developing world, the “urban advantage” remains strong: many more children in rural areas die before the age of 5 due to lack of access to basic health care and poorly educated mothers. Addressing regional disparities is a key element of a strategy to reduce inequality and increase well being. Evidence shows that the factors that most influence peoples’ well-being are local issues, such as employment, access to health services, pollution and security. So, the policy responses must also be locally targeted. Policies that take better account of regional problems and needs may have a greater impact on improving well-being for the country as a whole by tackling the sources of inequality more directly. But to effectively target policies, governments need the tools to fully understand local conditions and the expectations of their citizens. The publication "How's Life in Your Region", which will be launched in September 2014, will help policy makers to:
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Inequality is a key driver of individual and country’s well-being and this is why inequality is one of the distinctive features of the OECD well-being measurement framework adopted in the OECD Better Life Initiative.
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Click on the image to access the Better Life Index |