Disparities in health, education and wages across Europe require new policies

The demonstrations sweeping the world signal that, despite unprecedented progress, many societies are not working as they should. The connecting thread, argues a new report from the United Nations Development Programme (UNDP), is inequality.

The 2019 Human Development Report, titled “Beyond income, beyond averages, beyond today: inequalities in human development in the 21st century,” says that disparities in health, education and income persist worldwide and in Europe, both among and within countries. Income and wealth inequality have worsened, and automation has polarized the labor market, with higher risk of instability for many in the middle class.

These findings reflect global trends. Around the world, new inequalities are becoming more pronounced, particularly around tertiary education, and the seismic effects of technology and the climate crisis. The Human Development Report (HDR), which pioneers a more holistic way to measure countries’ socioeconomic progress, says that just as the gap in basic living standards is narrowing, with an unprecedented number of people worldwide escaping poverty, hunger and disease, the necessities to thrive have evolved, with implications for countries at all stages of development.

“Different triggers are bringing people onto the streets -- the cost of a train ticket, the price of petrol, demands for political freedoms, the pursuit of fairness and justice. This is the new face of inequality, and as this Human Development Report sets out, inequality is not beyond solutions,” says UNDP Administrator, Achim Steiner.

The report analyzes inequality in three dimensions – beyond income, beyond averages, and beyond today – and proposes a battery of policy options to tackle it.

In Europe, inequalities in health, education and income

Europe has seen some of the biggest gains in human development over the past decade. Ireland, for example, had the highest increase in rank on the Report’s accompanying Human Development Index (HDI), rising 13 places between 2013 and 2018. Seven of the top 10 positions on the HDI are held by European countries, five of which are members of the European Union.

Yet European countries have generally experienced the same broad inequality trends as countries elsewhere. Income and wealth inequality have both deepened in many countries, even though inequalities drop significantly after taxes and transfers. More importantly, disparities persist in health and education.

Spain loses more than 14 per cent of its human development value when adjusted for inequality, according to the report’s Inequality-adjusted Human Development Index (IHDI). The IHDI also lowers the rankings of Portugal, Greece and Italy, each losing more than 12 per cent of their human development value when adjusted for inequality. In contrast, Czechia, Finland, Iceland and Slovenia record the smallest losses in the region due to inequality.

The range in healthy life expectancy across countries in Europe – that is, the number of years of good health one can expect at birth – is nearly twice as high as it is for life expectancy at birth, reflecting a new stream of inequalities as people live longer but experience discrepancies in quality of life.

The report also points to a class divide in education. It cites a 2017 OECD report showing a correlation between having wealthier parents and stronger educational performance, and notes that lower-wage workers are less likely to pursue adult education.

Universalism as we know it in Europe, especially in areas like health and education, was the result of policy choices,” says Pedro Conceição, Director of the HDR team.

“This report points to ways that universalism can be brought to bear on the new generation of inequalities we are seeing emerge.”

The glass ceiling for women is also proving hard to break. The report estimates that worldwide, it will take 202 years to close the gender gap in economic opportunity alone, based on current trends. In Europe, the gender pay gap has narrowed, but inequalities remain and, in rare instances, such as in the Netherlands, actually increased during the measurement period of 2002 and 2014.

And a new “social norms index” in the report says that only one in 10 men and one in seven women in the world does not have a serious bias against gender equality. For instance, about 50 per cent of people across 77 countries said they thought men make better political leaders than women, while more than 40 per cent felt that men made better business executives. The report notes that these invisible barriers are in the way of faster progress: countries with higher social norms biases tend to have higher gender inequality. In Europe, biases against gender equality are less intense than in the rest of the world, however, it is where there is greater evidence of backlash, in particular in Sweden and among German men.  A new generation of policies that address underlying biases, social norms and power structures are key for making gender equality a reality.

Climate change and technology, tectonic forces

Thanks to ambitious climate policies, greenhouse gas emissions in Europe have fallen by about 22 per cent since 1990, exceeding the EU target of 20 per cent by 2020. But progress has stalled over recent years, with emissions fluctuating.

The report notes that policies crucial to tackling the climate crisis like putting a price on carbon must be carefully managed to avoid increasing perceived and actual inequalities for the less well-off, who spend more of their income on energy-intensive goods and services than their richer neighbours. If revenues from carbon pricing are ‘recycled’ to benefit taxpayers as part of a broader social policy package, the authors argue, then such policies could reduce inequality.

Europe faces similar risk and opportunities as other regions from ongoing technological advancements. Labor markets are increasingly polarized, as medium-skilled, routine jobs are at the most risk from automation.

According to European Commission estimates, 45 to 60 per cent of European jobs could be replaced by automation by 2030. But the EC also estimates that 96 per cent of all workers at threat from technology could find similar or better work with adequate training.

Beyond income, beyond averages, beyond today

The report recommends policies that go beyond income and are anchored in lifespan interventions starting even before birth. Such investments must continue through a person’s life, from pre-natal care, to education, to the labour market and retirement.

Fiscal redistribution varies across Europe, in terms of both size and progressiveness of transfers. The report argues that taxation must be part of a broader system of policies that enhance governance, improve public expenditure management and provide alternatives to a carbon-intensive lifestyle.

Averages hide what is really going on in society, says the HDR, and while they can be helpful in telling a larger story, much more detailed information is needed to create policies to tackle inequality effectively.

Looking beyond today, the report asks how inequality may change in future, particularly through the lens of climate change and technological transformation, which are shaping human development outcomes into the next century.

As the world changes, so do the inequalities that matter,” says Conceição. “The good news is that they are not inevitable. Every society has a choice about the level and kind of inequality it is prepared to tolerate.”

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2019 HDR Broadcast Package: 

https://www.dropbox.com/sh/vl0qjm3g1nvcg4k/AABXqgDA86UkT9MLTjURmGE4a?dl=0

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UNDP Around the world