La era de la desigualdad (¿consecuencia directa del "imperialismo monetario"?) – Parte III (página 3)

Desde la crisis financiera de 2008 y la Gran Recesión, el incremento de la desigualdad y la brecha social en economías emergentes y avanzadas se ha convertido en un importante problema. Es por ello que el Fondo Monetario Internacional (FMI) afirma en un informe que para respaldar un crecimiento económico sostenible, "la redistribución del ingreso debe basarse en instrumentos fiscales que permitan alcanzar los objetivos de distribución con el menor costo posible en términos de eficiencia económica".

La creciente desigualdad observada en los últimos años ha agudizado la presión para usar la política fiscal como herramienta de redistribución del ingreso. Aunque a fin de cuentas es a cada gobierno nacional al que le toca decidir cuánta redistribución debe realizar exactamente el Estado, la concepción de las políticas mismas ejerce una influencia crítica en los efectos que tendrán en la eficiencia y el crecimiento.

El nuevo estudio

La concepción de políticas fiscales redistributivas eficientes y propicias para el crecimiento es el tema que aborda un nuevo estudio sobre la política fiscal y la desigualdad del ingreso elaborado por el personal técnico del FMI. Este estudio se suma a los anteriores trabajos realizados por el personal técnico del FMI para analizar los efectos de la desigualdad sobre el crecimiento. El mes pasado, el Departamento de Estudios del FMI publicó otro documento sobre este tema.

De acuerdo con la institución, con sede en Washington, la concepción de una política fiscal redistributiva eficiente abarca cuatro dimensiones clave:

– Primero, una política fiscal redistributiva debe ser coherente con los objetivos de la política macroeconómica. El nivel de gasto en redistribución, por ejemplo, debería estar acorde con la estabilidad macroeconómica; además, es necesario comparar los beneficios de un gasto adicional en redistribución con los beneficios de un gasto adicional en otros ámbitos prioritarios, como la infraestructura.

– Segundo, los impuestos y los gastos deberían evaluarse conjuntamente. Por ejemplo, un aumento de la recaudación del impuesto al valor agregado (IVA) utilizado para financiar más gastos en enseñanza primaria podría resultar progresivo en términos netos.

– Tercero, las políticas de redistribución deben estar concebidas de manera que equilibren los objetivos de redistribución y de eficiencia. Algunas políticas redistributivas, como las que fortalecen el capital humano, de hecho pueden promover la eficiencia. Pero en otros casos quizás haya que sacrificar algo.

– Cuarto, las políticas deben diseñarse teniendo en cuenta la capacidad administrativa.

– La desigualdad, el nuevo caballo de batalla del FMI (El Economista – 15/3/14)

(Por Alfonso Fernández)

El Fondo Monetario Internacional (FMI) ha situado su nuevo caballo de batalla en la lucha contra la creciente desigualdad económica, tendencia que ve generalizada tanto en avanzados como emergentes y que ya ha advertido que puede hacer descarrilar la tímida recuperación en marcha.

El organismo dirigido por Christine Lagarde subrayó esta semana en un amplio estudio sobre desigualdad y política fiscal que "en las últimas tres décadas, la desigualdad ha crecido en casi todos los países".

De hecho, Lagarde ha llamado a esta tendencia uno de los "mayores flagelos" económicos de nuestro tiempo en repetidos discursos.

Por ello, y para hacer frente a la creciente desigualdad global, el FMI recomienda tratar con sumo cuidado las herramientas de política fiscal disponibles.

Esta tendencia, los cada vez más dispares rendimientos de los segmentos más ricos y menos ricos de la población, ha potenciado las exigencias de la ciudadanía por una mayor redistribución.

"Especialmente", explicó David Lipton, número dos del Fondo en una conferencia en Washington para presentar el informe, "en el contexto de tensiones sociales asociadas a la consolidación fiscal aplicada tras el estallido de la crisis financiera de 2008".

Como caso paradigmático el Fondo ha puesto a EEUU, donde la cuota del total de ingresos capturada por el 10 % más rico de la población ha pasado del 30 % en 1980 al 48 % en 2012, aunque observa una trayectoria similar en casi todos los países.

Para los avanzados, el FMI recomienda elevar la edad de jubilación, con "el objetivo de mejorar la estabilidad financiera de los planes de pensiones sin reducir beneficios", y reducir exenciones regresivas como las desgravaciones por propiedad de inmuebles.

En Europa, donde se han impuesto duros planes de ajuste para hacer frente a la crisis en las finanzas públicas, el Fondo destaca las políticas progresivas aplicadas en países como España, Grecia, Letonia, Portugal y Rumanía entre 2008 y 2012, donde los estratos mejor situados soportaron el grueso del ajuste.

En el lado opuesto, sitúa a Reino Unido o Italia, cuyas políticas han sido menos equitativas.

Asimismo, Lipton advirtió de los riesgos de políticas redistributivas erróneas y mal ajustadas en los países emergentes.

"La redistribución puede apoyar el crecimiento porque reduce la desigualdad, pero puede ser muy costosa si está mal diseñada", afirmó al apuntar como ejemplo los ineficientes subsidios energéticos en países en desarrollo.

El organismo se ha lanzado en una cruzada contra este tipo de subsidios, que favorecen de manera desproporcionada a aquellos con mayores ingresos.

Además, el Fondo, que había hasta ahora mantenido una cautelosa distancia respecto a la desigualdad tanto de ingreso como de riqueza dentro del crecimiento general, ha empezado a reconocer las complicadas consecuencias sociales que puede tener al vincularlo a las protestas que se han visto en los últimos años en países como Turquía, Brasil, Venezuela o Egipto.

"En muchos países en desarrollo, el 40 % más pobre recibe menos del 40 % del total de beneficios sociales, lo que contribuye a la desigualdad de oportunidades y una baja movilidad intergeneracional", explicó Lipton.

No obstante, y pese a valorar el reciente énfasis en la cuestión por parte de los técnicos del Fondo, organizaciones como Oxfam piden que salga del ámbito académico y empiece a aplicar estas recetas en el día a día de la institución.

Críticas al FMI

"Esperemos que esto signifique un cambio a largo plazo en las recomendaciones de política del FMI a los países: invertir en educación y sanidad y políticas fiscales más progresivas", dijo a Efe Nicolas Mombrial, portavoz de Oxfam en Washington.

Asimismo, apuntó a un elemento ausente en el análisis de la institución: "es preocupante que no identifique la evasión fiscal de las empresas como un generador de desigualdad (…) Las compañías deben contribuir con su parte".

– Concepción sólida de las políticas: La manera eficiente de reducir la desigualdad (Boletín del FMI – 13 de marzo de 2014)

La desigualdad va en aumento en muchas regiones del mundo

Las políticas fiscales pueden ayudar a los países a reducir la desigualdad

Se pueden diseñar políticas redistributivas teniendo en mente la eficiencia

Para respaldar un crecimiento económico sostenible, la redistribución del ingreso debe basarse en instrumentos fiscales que permitan alcanzar los objetivos de distribución con el menor costo posible en términos de eficiencia económica.

La creciente desigualdad observada en los últimos años ha agudizado la presión para usar la política fiscal como herramienta de redistribución del ingreso. Aunque a fin de cuentas es a cada gobierno nacional al que le toca decidir cuánta redistribución debe realizar exactamente el Estado, la concepción de las políticas mismas ejerce una influencia crítica en los efectos que tendrán en la eficiencia y el crecimiento.

La concepción de políticas fiscales redistributivas eficientes y propicias para el crecimiento es el tema que aborda un nuevo estudio sobre la política fiscal y la desigualdad del ingreso elaborado por el personal técnico del FMI. Este estudio se suma a los anteriores trabajos realizados por el personal técnico del FMI para analizar los efectos de la desigualdad sobre el crecimiento. El mes pasado, el Departamento de Estudios del FMI publicó otro documento sobre este tema.

Analizar el efecto de las políticas de tributación y gasto en la eficiencia y la manera en que afectan a las metas de distribución es una tarea que forma parte desde hace tiempo del asesoramiento en materia de políticas brindado por el FMI a los países miembros en el contexto de la asistencia técnica. Una inquietud común de los programas de préstamo del FMI es cómo diseñar medidas de política fiscal que sean coherentes con los objetivos de distribución de las autoridades. El estudio reúne la vasta experiencia del FMI en estos ámbitos.

"La concepción es importante para la redistribución fiscal", señala David Lipton, Primer Subdirector Gerente del FMI. "Si la redistribución está mal concebida, o si va demasiado lejos, puede provocar distorsiones", precisó Lipton, "pero algunas políticas fiscales redistributivas -como las que realzan el capital humano de los hogares de bajo ingreso- de hecho pueden ayudar a mejorar la eficiencia y respaldar el crecimiento".

Tendencias de la desigualdad

"A lo largo de las tres últimas décadas, la desigualdad ha aumentado en la mayor parte de los países. Si bien el nivel de desigualdad se ha reducido en América Latina y África subsahariana en los últimos tiempos, resultan sorprendentes las persistentes diferencias entre una región y otra: América Latina sigue teniendo los índices más altos de desigualdad, y las economías avanzadas, los más bajos".

Un aspecto que ha captado la atención últimamente es la creciente proporción de la población que percibe el máximo de los ingresos. El estudio sugiere que la tendencia no parece ser uniforme a nivel mundial. En algunas economías, como Estados Unidos y Sudáfrica, los ingresos del 1% más acaudalado han aumentado vertiginosamente en las últimas décadas, pero en Europa continental y Japón se han mantenido mayormente sin cambios. Hay opiniones encontradas sobre las causas de este fenómeno. Algunos observadores destacan el impacto de la globalización y las nuevas tecnologías; otros, las medidas adoptadas, como los recortes de las tasas impositivas; y otros, el comportamiento rentista de los ejecutivos.

La experiencia de los países con la política redistributiva

En el mundo entero, los países han recurrido a distintos tipos de políticas redistributivas para hacer frente a la desigualdad. De acuerdo con el estudio elaborado por el personal técnico del FMI, las economías avanzadas, en promedio, han logrado reducir la desigualdad en aproximadamente una tercera parte, gracias a una combinación de transferencias sociales (por ejemplo, seguro de desempleo y prestaciones de jubilación) e impuestos redistributivos (por ejemplo, impuestos progresivos sobre la renta). Otras prestaciones, como el gasto público en salud, educación y vivienda, ayudan a reducir aún más la desigualdad.

También se ha observado que una combinación adecuada de medidas puede ayudar a compensar los efectos negativos del ajuste fiscal sobre la desigualdad. En casi la mitad de una muestra de 27 economías avanzadas y emergentes de Europa que emprendieron ajustes fiscales en 2007–12, la desigualdad aumentó. Sin embargo, en muchas de estas economías, la labor de concepción de estas medidas permitió atenuar sus efectos. En dos terceras partes de estas economías, las medidas fiscales permitieron reducir la desigualdad o, por lo menos, compensar el efecto de una desigualdad cada vez mayor.

En los países en desarrollo, la política fiscal ha desempeñado un papel más modesto. Los ingresos tributarios son mucho menores (como proporción del producto nacional) en las economías en desarrollo, con la excepción de las economías emergentes de Europa. En términos de la composición, los impuestos al consumo representan una proporción mucho mayor y tienden a ser menos redistributivos que los impuestos sobre la renta. Análogamente, del lado del gasto, el gasto redistributivo -particularmente en protección social- es mucho menor que en las economías avanzadas.

El estudio determinó también que en las economías en desarrollo una proporción mayor del gasto social beneficia a grupos de ingreso más alto. Con la excepción de las economías emergentes de Europa, el 40% más pobre de la población se beneficia de menos de 20% del gasto en protección social. La cobertura de las prestaciones sociales, en términos del porcentaje de los hogares pobres que las reciben, también es baja, excepto en las economías emergentes de Europa y América Latina.

La situación es parecida en lo que respecta al gasto en educación y salud. En muchas economías en desarrollo, el 40% más pobre recibe menos de 40% del total de las prestaciones. Esto se debe a que los pobres suelen carecer de acceso a estos servicios, lo cual contribuye a la desigualdad de oportunidades y atenta contra la movilidad intergeneracional.

Opciones para lograr una redistribución eficiente

De acuerdo con el estudio, la concepción de una política fiscal redistributiva eficiente abarca cuatro dimensiones clave:

• Primero, una política fiscal redistributiva debe ser coherente con los objetivos de la política macroeconómica. El nivel de gasto en redistribución, por ejemplo, debería estar acorde con la estabilidad macroeconómica; además, es necesario comparar los beneficios de un gasto adicional en redistribución con los beneficios de un gasto adicional en otros ámbitos prioritarios, como la infraestructura.

• Segundo, los impuestos y los gastos deberían evaluarse conjuntamente. Por ejemplo, un aumento de la recaudación del impuesto al valor agregado (IVA) utilizado para financiar más gastos en enseñanza primaria podría resultar progresivo en términos netos.

• Tercero, las políticas de redistribución deben estar concebidas de manera que equilibren los objetivos de redistribución y de eficiencia. Algunas políticas redistributivas, como las que fortalecen el capital humano, de hecho pueden promover la eficiencia. Pero en otros casos quizás haya que sacrificar algo.

• Cuarto, las políticas deben diseñarse teniendo en cuenta la capacidad administrativa.

Partiendo de estos principios, se perfila una serie de opciones de reforma que podría lograr la redistribución con eficiencia. Del lado impositivo, algunos países podrían plantearse la posibilidad de imprimir más progresividad al régimen de tributación de la renta. Por ejemplo, en las economías con una tasa plana quizás haya margen para que la tributación de los estratos más altos sea más progresiva. Algunas economías avanzadas también podrían plantearse eximir a los asalariados con baja remuneración del impuesto sobre la renta o de los aportes sociales.

En términos generales, los impuestos al consumo (como el IVA) no son tan eficientes como los impuestos directos para lograr las metas de redistribución. Como los ricos suelen gastar más, en términos absolutos, en artículos de primera necesidad como los alimentos o la energía, se benefician considerablemente cuando esos artículos son objeto de exenciones o tasas más bajas. En estos casos, algunos gobiernos podrían plantearse reducir al mínimo las exenciones y las tasas especiales para incrementar el ingreso de manera eficiente y financiar así con más facilidad el gasto a favor de los pobres. Cuando los programas no puedan llegar a los pobres debido a limitaciones de capacidad, se justifica plenamente hacer alguna diferenciación entre las tasas del IVA (por ejemplo, para alimentos básicos).

Del lado del gasto, los gobiernos podrían proponerse mejorar el acceso a la enseñanza y los servicios de atención de la salud. Según el estudio del FMI, mejorar el acceso de las familias de bajo ingreso a la educación constituye una herramienta eficiente para promover la igualdad de oportunidades y, a largo plazo, también puede reducir la desigualdad del ingreso.

Con el mismo ánimo, ampliar el acceso de los pobres a los servicios de atención de la salud en las economías en desarrollo también puede contribuir a promover la igualdad de oportunidades de manera eficiente. En las economías avanzadas, mantener el acceso de los pobres a los servicios de salud durante períodos de restricción del gasto público es también congruente con una redistribución eficiente.

Estas políticas pueden beneficiar a todas las partes interesadas y, a la vez, mejorar tanto la igualdad como la eficiencia.

– Fiscal Policy and Income Inequality

(by David Lipton)

First Deputy Managing Director, IMF

At The Peterson Institute for International Economics

Washington, D.C., March 13, 2014

Thank you for providing me the opportunity to present the key findings of a new IMF study on fiscal policy and income inequality.

Income inequality has been rising in many parts of the world in recent decades. This, and the social tensions associated with fiscal consolidation that many have faced in part stemming from the global financial crisis, have put the distributional impact of governments" tax and spending policies at the heart of the public debate in many countries. Of course, the question of just how much redistribution the state should do is, at its core, a political one that economic analysis cannot answer. But I think that we can all agree that whatever degree of redistribution governments choose, it should be done with fiscal instruments that achieve their distributional objectives at a minimum cost to economic efficiency.

The design of these growth-friendly, efficient redistributive fiscal policies is the focus of my presentation today.

Some may be surprised that the Fund is engaging in this debate on the design of redistributive policies. The truth of the matter is that we have been at this for a long time. Assessing the effect of tax and expenditure policies on efficiency, and any potential tradeoffs with distributional goals, has long been an important component of the IMF"s policy advice. Furthermore, the design of Fund-supported programs is inevitably influenced by the authorities" distributional objectives. Whenever we discuss social safety net programs, or the level of health and education expenditures, and how to generate the revenues or finance to sustain them, subjects we routinely address, we are discussing redistribution policy.

Our record for protecting the poor in the design of Fund-supported programs has a longstanding history, going back to the Camdessus era in the 1980s.

So, this paper should thus be seen as the Fund"s advice to its membership, based on our extensive experience. Of course, one reason why we are discussing this issue today is that the interest in redistribution as reflected in public surveys and our discussions with our members is higher than in the past. Our members want to explore with us how they can pursue distributive policies in an efficient manner.

The key message that I want to convey today is that when it comes to fiscal redistribution, design matters. This is consistent with a recent IMF staff study by Ostry et al, which finds that, on average, inequality is associated with lower growth. Thus fiscal redistribution can help support growth because it reduces inequality. What we see is a diversity of experience across countries with redistributive policies. Some redistributive fiscal policies can help improve efficiency and support growth, such as those that enhance the human capital of low-income households. Let me be clear, redistributive policies can generate a tradeoff between equality and efficiency, and if misconceived, this tradeoff can be very costly. I will cite examples of this problem later on. But as I said, design matters, and smart design can help to minimize the adverse effects of redistributive policies on incentives to work, save, and invest.

My presentation today will cover three broad topics, including trends in inequality, the experience of countries in using redistributive policy, and options for achieving more efficient redistribution.

Let us first move to the discussion of trends in inequality. This figure presents the trends in the average Gini coefficient for disposable income. Gini coefficient ranges from 0 to 1, with larger values representing higher inequality. Disposable income is market income after income and wealth taxes and cash transfers. Over the last three decades, the Gini coefficient has increased in most countries, indicating an increase in inequality. In Latin America and sub-Saharan Africa, however, there has been a declining level of inequality more recently. What is most striking in the figure, however, are the persistent differences across regions, with Latin America having the highest inequality and the advanced economies having the lowest.

More recently, there has been great attention to the rising share of top income earners. The trends across countries appear mixed. In some economies, such as the United States and South Africa, the share of the top one-percent has increased dramatically in recent decades, but not so in continental Europe and Japan, where it has been largely unchanged. There are differing views of the causes of the rising share of the top one percent. Some emphasize the impact of globalization and new technologies, while others highlight policy choices, such as reductions in tax rates, and others the rent-seeking behavior of executives.

If we compare the distribution of income with that of wealth, we can see that wealth is much more unequally distributed, as indicated by the higher Gini coefficients. In a similar vein, a recent Oxfam study found that that the richest 85 people in the world own the same amount of wealth as the bottom half of the world"s population. Both the high degree of inequality of wealth, and the increased share of the top one percent, have fueled the recent debate on income and wealth taxation.

Let us now turn to country experience with different instruments for fiscal redistribution. We will start with the advanced economies, where countries are already doing a substantial amount of redistribution. The average market income Gini, i.e., in the absence of any fiscal redistribution, is 0.43. Redistributive transfers and taxes reduce inequality by about a third, with about two-thirds of this coming from transfers.

The previous slide does not include the impact of in-kind benefits, such as public spending on health, education, and housing. In the countries selected here, it is estimated that in-kind transfers further reduce the market Gini, on average, by more than 10 percent. Thus, we can conclude that based on both direct and in-kind benefits, fiscal policy has played a major role in reducing inequality in advanced economies, although its extent varies across countries.

So what about developing economies? Developing economies here include both emerging and low-income countries. It appears that fiscal policy has played a much more modest role there. Let"s first look at the tax side. The levels of tax revenues are significantly lower in developing economies, with the exception of emerging Europe. In terms of composition, indirect taxes, like the VAT, account for a much larger share, which tend to be less progressive than direct taxes such as the income tax. On the expenditure side, again, levels of redistributive expenditures are much lower, particularly when it comes to social protection.

A lot of the social spending in developing economies is not well designed and targeted and actually increases inequality. With the exception of emerging Europe, the poorest 40 percent of the population receive less than 20 percent of the benefits of social protection spending. The coverage of social benefits, in terms of the percentage of poor households that receive benefits, is also low, except in emerging Europe and Latin America.

In this context, it is also important to note that many developing countries use energy subsidies as a form of social assistance. But as we underscored in the work we presented at the Peterson Institute last year, these subsidies disproportionately benefit upper-income groups.

Education and health spending in developing economies is also not well targeted and exacerbates inequality. In many developing economies, for example, the poorest 40 percent receive less than 40 percent of the total benefits, which contributes to inequality of opportunity and low intergenerational mobility. One reason for this is that the poor often lack access to these services, reflecting the fact that many of them live in poor rural areas while services are concentrated in urban areas.

This discussion of the redistributive effect of fiscal policy in advanced and developing economies has important implications for the design of fiscal consolidation packages. As shown in our paper, a number of economies have adopted progressive adjustment measures during their recent fiscal consolidations. As a result, the burden of these adjustment measures on the bottom 20 percent of the population was lower than that of upper income groups. For example, in Greece, Latvia, Portugal, Romania, and Spain, cuts in public sector pay had a smaller effect on civil servants toward the bottom of the pay-scale. In Spain and the United Kingdom, increases in income taxation were born more heavily by upper-income groups.

Let us now turn to options for designing fiscal redistribution in an efficient manner. We see four key considerations in designing efficient redistributive fiscal policy:

First, redistributive fiscal policy should be consistent with macroeconomic policy objectives. The level of spending on redistribution, for example, should be consistent with macroeconomic stability. In addition, the benefits of additional spending on redistribution should be compared with the benefits of raising spending in other priority areas, such as infrastructure.

Second, taxes and expenditures should be evaluated jointly. For example, an increase in VAT revenues, used to finance higher spending in secondary education, could -on net- be progressive.

Third, the design of redistribution policies should account for both redistributive and efficiency objectives. Some redistributive policies may in fact enhance efficiency, such as those that strengthen human capital. But with others there may be the need to manage a tradeoff.

And fourth, design should take into account administrative capacity.

Based on these principles, we examine a range of options for achieving redistribution efficiently. The paper provides an extensive discussion of instruments. In the interest of time, I will focus on a few of the most important options discussed in the paper. These measures could be implemented as part of long-term fiscal reforms aimed at achieving redistributive objectives more efficiently. They could also be integrated into the design of fiscal consolidation strategies that aim to help governments achieve redistributive goals at a lower fiscal cost.

The primary contribution of taxation to reducing income inequality is through its financing of redistributive spending measures in a way that it does not harm growth. Nevertheless, taxes can also have a direct effect on redistribution. This is particularly the case for income taxes.

To start, countries could consider making their income tax systems more progressive. For example, in economies where a flat rate is used, there may be scope for more tax progression at the top. Since the mid-1990s, 27 countries -especially in Central and Eastern Europe and Central Asia– have introduced flat tax systems, usually with a low marginal rate. The top personal income tax rate must, however, be set with care. If it is too high, taxpayers will find ways to avoid or evade the tax and a higher rate may no longer raise extra revenue. In many developing economies, both fairness and equity could be enhanced by bringing more informal operators into the personal income tax.

There is also scope to more fully utilize property taxes, both as a source of revenue and as an efficient redistributive instrument. This applies also to developing economies, where only Colombia, Namibia, Russia, South Africa, and Uruguay collect more than 1 percent of GDP through recurrent property taxes.

Indirect taxes, including the VAT, are generally less effective in achieving redistributive goals than direct taxes. On the VAT, the recommendation is thus to minimize exemptions and special rates, in order to efficiently raise revenues to help finance pro-poor spending. For instance, elimination of reduced VAT rates in the United Kingdom, and using the proceeds to increase social benefits, would significantly reduce inequality. Earlier work at the IMF has shown that in Ethiopia, the net impact of a uniform VAT, with the proceeds used for general spending on education and health, would have a strong progressive impact. However, where capacity constraints prevent spending programs from reaching the poor, there can be a case for some differentiation in VAT rates, for example for basic foods that are a large part of the spending of the poor.

On the expenditure side, I would like to start first with education. Improving the access of low-income families to education is an efficient tool for boosting equality of opportunity, and over the long run, it can also reduce income inequality. In advanced economies, this entails increasing the access to tertiary education for low-income families, including through scholarships and loans. For developing economies, a strengthening of access to quality secondary education is also required, for example, by eliminating tuition fees.

Along the same lines, improving the access of the poor to health care services in developing economies can provide a head start to greater opportunity and do so in an efficient manner. Some countries, including China, Ghana, India, and Mexico, have taken important steps toward universal coverage in recent years. In advanced economies, maintaining the access of the poor to health services during periods of expenditure constraint is also consistent with efficient redistribution.

To make social transfers more efficient in advanced economies, there could be greater use of active labor market programs and in-work benefits for social benefit recipients. This would, for example, require beneficiaries to participate in active labor market programs, such as job training, as a condition for receiving benefits, as done in Belgium, the Slovak Republic, and Slovenia.

The second reform measure that I will focus on is to expand conditional cash transfer programs in developing economies. These programs make benefits conditional on the attendance of children at health clinics and at school. Means-testing helps keep the fiscal cost low. This policy can help boost both equality of opportunity and income inequality. For instance, the direct impact of such transfers in Brazil and Mexico accounts for one-fifth of the reduction in inequality between 1995 and 2004 in these two countries. A strengthening of administrative capacity, however, is required for implementing these programs in many developing economies.

Pensions have played an important role in reducing income inequality. To improve the sustainability of pension systems and maintain their role in protecting the elderly poor, many economies could consider increasing effective retirement ages. This would need to be accompanied by measures to ensure that lower-income workers are fully protected, as needed, with disability pensions and social assistance if they are unable to work. In developing economies, to ensure wider coverage of pensions at a reasonable fiscal cost, a viable option is to expand noncontributory, means-tested social pensions. Social pensions in some form exist in both emerging and low-income developing countries, including in Chile, Ethiopia, India, and South Africa.

Many countries have been grappling with the twin challenge of putting their pension systems on sound financial footing while safeguarding or expanding their important role in alleviating old-age poverty. I would like to take this opportunity to bring your attention to a new IMF book, "Equitable and Sustainable Pensions: Challenges and Experience," which we are also launching today. The book examines the complex equity issues involved in designing pension systems, including generational and gender equity. It also presents 12 country cases studies to help draw lessons for designing sustainable and equitable pension systems.

Let me end where I started. Many advanced and developing economies are facing the challenge of rising inequality. Fiscal policy has played a major role in reducing inequality in the past and is the primary tool available for governments to affect income distribution. Whether these policies help, or hurt growth, is all a matter of design. And the details matter. Thus, debates on the impact of the government"s redistributive policies must go far beyond a mere discussion of tax and spending ratios. In the end, it is design that matters. And on this, the good news is that quite a lot is now known about how governments can best address the challenges of squaring their equity and efficiency concerns, a task on which the Fund stands ready to help.

Thank you.

– España sufre la curva del Gran Gatsby: quienes nacen pobres, morirán pobres (Vozpópuli – 19/3/14)

El FMI advierte que España empieza a vivir bajo la curva del Gran Gatsby: no existe movilidad social y quienes nacen ricos siguen siendo ricos mientras que los hijos de los pobres morirán pobres, denuncia el organismo internacional que afirma que la desigualdad de rentas se está contagiando a futuras generaciones y se convierte en "desigualdad de oportunidades".

Cuando F. S. Fitzgerald escribió "El Gran Gatsby" y puso al pobre Nick Carraway ante el escaparate de la riqueza de Gatsby sólo para devolverlo después a la pobreza, nunca pensó que el Fondo Monetario Internacional utilizaría su relato para trazar la curva de la inmovilidad social. Pero la actual crisis económica está convirtiendo esa historia casi en una profecía sobre la situación actual. Según el Fondo Monetario Internacional, países como España empiezan a vivir bajo esa curva que implica que quienes nacen ricos, morirán ricos y que quienes nacen pobres, morirán pobres. La curva que mide las posibilidades de saltar de una clase baja a una más alta refleja que la desigualdad empieza a heredarse entre generaciones y que la "desigualdad de rentas" se está convirtiendo en "desigualdad de oportunidades".

Según el último informe del FMI titulado "Política Fiscal y Desigualdad de ingresos", los países con mayores tasas de desigualdad son los mismos con menor posibilidad de ascenso social. Eso empieza a ocurrir en España, denuncia el Fondo.

De hecho, España resulta ser un país en el que la desigualdad se hereda más que en Alemania, Japón, Australia o Canadá, entre otros. Por contra, la República Checa, Italia o Gibraltar son, entre otros, países donde la cuna determina más que en España la clase social adulta.

Según los datos del FMI, desde mediados de los 80 hasta principios del año 2000, la mitad de la riqueza que se ha generado ha ido a parar a las manos del 20% de los más ricos. Y España se ha convertido en uno de los países en los que más del 50% de las ventajas económicas que posee un padre son heredadas por sus hijos. Según el FMI, el contagio de esa desigualdad presente está provocando la "desigualdad de oportunidades".

El futuro puede no terminar de corregir el pasado

El diagnóstico del FMI es doblemente preocupante porque coincide con el que acaba de publicar la OCDE. Según el club de los países desarrollados, la recuperación no significará el recorte de la desigualdad. "Los episodios de recortes de la desigualdad, normalmente no duran lo suficiente como para atenuar el distanciamiento entre las rentas altas y bajas abierto durante los años precedentes", concluye el organismo internacional.

De hecho, los recortes que se han llevado a cabo son, precisamente, responsables de que exista menos "movilidad social", es decir, menos posibilidades de escalar de una clase social baja a una alta, especialmente en dos terrenos: 

• Educación: "Las consecuencia del menor gasto público en educación tardarán en notarse pero se sentirán en una menor inscripción estudiantil, rentas más bajas y menor ascenso social para los hijos de los padres más pobres", concluye la OCDE.

• Sanidad: El desempleo y los sistemas de copago recortan el recurso a la Sanidad. En España, el recorte del gasto sanitario ha sido del 0,7% del PIB anual. Ese ahorro a corto plazo suele traducirse en aumentos del gasto mayores a largo plazo, afirma el organismo y en mayores desigualdades.

Entre los parámetros que se investigan, figuran las tasas de suicidio. La OCDE revela que aumentaron con el comienzo de la crisis pero se han mantenido estables desde entonces.

POLÍTICA FISCAL Y DESIGUALDAD DEL INGRESO

– Concepción sólida de las políticas: La manera eficiente de reducir la desigualdad (FMI – 13/3/14)

Boletín del FMI

13 de marzo de 2014

• La desigualdad va en aumento en muchas regiones del mundo

• Las políticas fiscales pueden ayudar a los países a reducir la desigualdad

• Se pueden diseñar políticas redistributivas teniendo en mente la eficiencia

Para respaldar un crecimiento económico sostenible, la redistribución del ingreso debe basarse en instrumentos fiscales que permitan alcanzar los objetivos de distribución con el menor costo posible en términos de eficiencia económica.

La creciente desigualdad observada en los últimos años ha agudizado la presión para usar la política fiscal como herramienta de redistribución del ingreso. Aunque a fin de cuentas es a cada gobierno nacional al que le toca decidir cuánta redistribución debe realizar exactamente el Estado, la concepción de las políticas mismas ejerce una influencia crítica en los efectos que tendrán en la eficiencia y el crecimiento.

La concepción de políticas fiscales redistributivas eficientes y propicias para el crecimiento es el tema que aborda un nuevo estudio sobre la política fiscal y la desigualdad del ingreso elaborado por el personal técnico del FMI. Este estudio se suma a los anteriores trabajos realizados por el personal técnico del FMI para analizar los efectos de la desigualdad sobre el crecimiento. El mes pasado, el Departamento de Estudios del FMI publicó otro documento sobre este tema.

Analizar el efecto de las políticas de tributación y gasto en la eficiencia y la manera en que afectan a las metas de distribución es una tarea que forma parte desde hace tiempo del asesoramiento en materia de políticas brindado por el FMI a los países miembros en el contexto de la asistencia técnica. Una inquietud común de los programas de préstamo del FMI es cómo diseñar medidas de política fiscal que sean coherentes con los objetivos de distribución de las autoridades. El estudio reúne la vasta experiencia del FMI en estos ámbitos.

"La concepción es importante para la redistribución fiscal", señala David Lipton, Primer Subdirector Gerente del FMI. "Si la redistribución está mal concebida, o si va demasiado lejos, puede provocar distorsiones", precisó Lipton, "pero algunas políticas fiscales redistributivas -como las que realzan el capital humano de los hogares de bajo ingreso- de hecho pueden ayudar a mejorar la eficiencia y respaldar el crecimiento".

Tendencias de la desigualdad

"A lo largo de las tres últimas décadas, la desigualdad ha aumentado en la mayor parte de los países. Si bien el nivel de desigualdad se ha reducido en América Latina y África subsahariana en los últimos tiempos, resultan sorprendentes las persistentes diferencias entre una región y otra: América Latina sigue teniendo los índices más altos de desigualdad, y las economías avanzadas, los más bajos".

Un aspecto que ha captado la atención últimamente es la creciente proporción de la población que percibe el máximo de los ingresos. El estudio sugiere que la tendencia no parece ser uniforme a nivel mundial. En algunas economías, como Estados Unidos y Sudáfrica, los ingresos del 1% más acaudalado han aumentado vertiginosamente en las últimas décadas, pero en Europa continental y Japón se han mantenido mayormente sin cambios. Hay opiniones encontradas sobre las causas de este fenómeno. Algunos observadores destacan el impacto de la globalización y las nuevas tecnologías; otros, las medidas adoptadas, como los recortes de las tasas impositivas; y otros, el comportamiento rentista de los ejecutivos.

La experiencia de los países con la política redistributiva

En el mundo entero, los países han recurrido a distintos tipos de políticas redistributivas para hacer frente a la desigualdad. De acuerdo con el estudio elaborado por el personal técnico del FMI, las economías avanzadas, en promedio, han logrado reducir la desigualdad en aproximadamente una tercera parte, gracias a una combinación de transferencias sociales (por ejemplo, seguro de desempleo y prestaciones de jubilación) e impuestos redistributivos (por ejemplo, impuestos progresivos sobre la renta). Otras prestaciones, como el gasto público en salud, educación y vivienda, ayudan a reducir aún más la desigualdad.

También se ha observado que una combinación adecuada de medidas puede ayudar a compensar los efectos negativos del ajuste fiscal sobre la desigualdad. En casi la mitad de una muestra de 27 economías avanzadas y emergentes de Europa que emprendieron ajustes fiscales en 2007-12, la desigualdad aumentó. Sin embargo, en muchas de estas economías, la labor de concepción de estas medidas permitió atenuar sus efectos. En dos terceras partes de estas economías, las medidas fiscales permitieron reducir la desigualdad o, por lo menos, compensar el efecto de una desigualdad cada vez mayor.

En los países en desarrollo, la política fiscal ha desempeñado un papel más modesto. Los ingresos tributarios son mucho menores (como proporción del producto nacional) en las economías en desarrollo, con la excepción de las economías emergentes de Europa. En términos de la composición, los impuestos al consumo representan una proporción mucho mayor y tienden a ser menos redistributivos que los impuestos sobre la renta. Análogamente, del lado del gasto, el gasto redistributivo -particularmente en protección social- es mucho menor que en las economías avanzadas.

El estudio determinó también que en las economías en desarrollo una proporción mayor del gasto social beneficia a grupos de ingreso más alto. Con la excepción de las economías emergentes de Europa, el 40% más pobre de la población se beneficia de menos de 20% del gasto en protección social. La cobertura de las prestaciones sociales, en términos del porcentaje de los hogares pobres que las reciben, también es baja, excepto en las economías emergentes de Europa y América Latina.

La situación es parecida en lo que respecta al gasto en educación y salud. En muchas economías en desarrollo, el 40% más pobre recibe menos de 40% del total de las prestaciones. Esto se debe a que los pobres suelen carecer de acceso a estos servicios, lo cual contribuye a la desigualdad de oportunidades y atenta contra la movilidad intergeneracional.

Opciones para lograr una redistribución eficiente

De acuerdo con el estudio, la concepción de una política fiscal redistributiva eficiente abarca cuatro dimensiones clave:

• Primero, una política fiscal redistributiva debe ser coherente con los objetivos de la política macroeconómica. El nivel de gasto en redistribución, por ejemplo, debería estar acorde con la estabilidad macroeconómica; además, es necesario comparar los beneficios de un gasto adicional en redistribución con los beneficios de un gasto adicional en otros ámbitos prioritarios, como la infraestructura.

• Segundo, los impuestos y los gastos deberían evaluarse conjuntamente. Por ejemplo, un aumento de la recaudación del impuesto al valor agregado (IVA) utilizado para financiar más gastos en enseñanza primaria podría resultar progresivo en términos netos.

• Tercero, las políticas de redistribución deben estar concebidas de manera que equilibren los objetivos de redistribución y de eficiencia. Algunas políticas redistributivas, como las que fortalecen el capital humano, de hecho pueden promover la eficiencia. Pero en otros casos quizás haya que sacrificar algo.

• Cuarto, las políticas deben diseñarse teniendo en cuenta la capacidad administrativa.

Partiendo de estos principios, se perfila una serie de opciones de reforma que podría lograr la redistribución con eficiencia. Del lado impositivo, algunos países podrían plantearse la posibilidad de imprimir más progresividad al régimen de tributación de la renta. Por ejemplo, en las economías con una tasa plana quizás haya margen para que la tributación de los estratos más altos sea más progresiva. Algunas economías avanzadas también podrían plantearse eximir a los asalariados con baja remuneración del impuesto sobre la renta o de los aportes sociales.

En términos generales, los impuestos al consumo (como el IVA) no son tan eficientes como los impuestos directos para lograr las metas de redistribución. Como los ricos suelen gastar más, en términos absolutos, en artículos de primera necesidad como los alimentos o la energía, se benefician considerablemente cuando esos artículos son objeto de exenciones o tasas más bajas. En estos casos, algunos gobiernos podrían plantearse reducir al mínimo las exenciones y las tasas especiales para incrementar el ingreso de manera eficiente y financiar así con más facilidad el gasto a favor de los pobres. Cuando los programas no puedan llegar a los pobres debido a limitaciones de capacidad, se justifica plenamente hacer alguna diferenciación entre las tasas del IVA (por ejemplo, para alimentos básicos).

Del lado del gasto, los gobiernos podrían proponerse mejorar el acceso a la enseñanza y los servicios de atención de la salud. Según el estudio del FMI, mejorar el acceso de las familias de bajo ingreso a la educación constituye una herramienta eficiente para promover la igualdad de oportunidades y, a largo plazo, también puede reducir la desigualdad del ingreso.

Con el mismo ánimo, ampliar el acceso de los pobres a los servicios de atención de la salud en las economías en desarrollo también puede contribuir a promover la igualdad de oportunidades de manera eficiente. En las economías avanzadas, mantener el acceso de los pobres a los servicios de salud durante períodos de restricción del gasto público es también congruente con una redistribución eficiente.

Estas políticas pueden beneficiar a todas las partes interesadas y, a la vez, mejorar tanto la igualdad como la eficiencia.

Society at a Glance 2014 – OECD Social Indicators – The crisis and its aftermath – March 2014

Executive summary

More than five years on from the financial crisis, high rates of joblessness and income losses are worsening social conditions in many OECD countries. The capacity of governments to meet these challenges is constrained by fiscal consolidation. However, cuts in social spending risk adding to the hardship of the most vulnerable groups and could create problems for the future. OECD countries can effectively meet these challenges only with policies that are well designed and backed by adequate resources. Having been spared the worst impacts of the crisis, major emerging economies face different challenges. However, the experience of OECD countries is relevant for emerging economies as they continue to build and "crisis-proof" their social protection systems.

The financial crisis has fuelled a social crisis

The financial upheaval of 2007-08 created not just an economic and fiscal crisis but also a social crisis. Countries that experienced the deepest and longest downturns are seeing profound knock-on effects on people"s job prospects, incomes and living arrangements.

Some 48 million people in OECD countries are looking for a job -15 million more than in September 2007- and millions more are in financial distress. The numbers living in households without any income from work have doubled in Greece, Ireland and Spain.

Low-income groups have been hit hardest as have young people and families with children.

Social consequences could linger for years

With households under pressure and budgets for social support under scrutiny, more and more people report dissatisfaction with their lives, and trust in governments has tumbled. There are also signs that the crisis will cast long shadows on people"s future well-being. Indeed, some of the social consequences of the crisis, in areas like family formation, fertility and health, will be felt only in the long term. Fertility rates have dropped further since the start of the crisis, deepening the demographic and fiscal challenges of ageing. Families have also cut back on essential spending, including on food, compromising their current and future well-being. It is still too early to quantify the longer-term effects on people"s health, but unemployment and economic difficulties are known to contribute to a range of health problems, including mental illness.

Invest today to avoid rising costs tomorrow

Short-term savings may translate into much higher costs in the future, and governments should make funding of investment-type programmes a priority. Today"s cuts in health spending need to avoid triggering rising health care needs tomorrow. Especially hard-hit countries should ensure access to quality services for children and prevent labour market exclusion of school leavers.

Vulnerable groups need support now

To be effective, however, social investments need to be embedded in adequate support for the poorest. Maintaining and strengthening support for the most vulnerable groups must remain a crucial part of any strategy for an economic and social recovery. Governments need to time and design any fiscal consolidation measures accordingly, as the distributional impact of such measures can vary greatly: for example, the poor may suffer more from spending cuts than from tax increases.

Room for cuts in unemployment spending is limited

Weak job markets provide little room for cuts in spending on unemployment benefits, social assistance and active labour market programmes. Where savings can be made, they should be achieved in line with the pace of recovery. Targeted safety-net benefits, in particular, are a priority in countries where such support does not exist, is difficult to access, or where the long-term unemployed are exhausting their unemployment support.

Across-the-board cuts in social transfers, such as housing and child/family benefits, should be avoided, as these transfers frequently provide vital support to poor working families and lone parents.

Targeting can deliver savings while protecting the vulnerable

More effective targeting can generate substantial savings while protecting vulnerable groups. Health care reforms, in particular, should prioritize protecting the most vulnerable. However, fine-tuning of targeting is necessary, in order to avoid creating perverse incentives that deter people from finding work. For instance, unemployed people who are about to start a job may suffer losses or may gain very little as they switch from benefits to earning a salary.

Support families" efforts to cope with adversity

There is a strong case for designing government support in ways that harness and complement -rather than replace- households" own capacities to cope with adversity. In this light, it is especially important to provide effective employment support, even if this means higher spending on active social policies in the short term. Labour market activation and in-work support should be maintained at reasonable levels. Where there are large numbers of households without work, policy efforts need to focus on ensuring they benefit quickly once labour market conditions improve. For instance, to be as effective as possible, work-related support and incentives should not be restricted to individual job seekers but should be made available to non-working partners as well.

Governments need to plan for the next crisis

To "crisis-proof" social policies and to maintain effective support throughout the economic cycle, governments must look beyond the recent downturn. First, they need to find ways to build up savings during upswings to ensure they can meet rising costs during downturns. On the spending side, they should link support more to labour market conditions – for example, by credibly reducing benefit spending during the recovery, and by shifting resources from benefits to active labour market policies. On the revenue side, they should work to broaden tax bases, reduce their reliance on labour taxes and adjust tax systems to account for rising income inequality. Second, governments need to continue the structural reforms of social protection systems begun before the crisis. Indeed, the crisis has accelerated the need for these. In the area of pensions, for example, some future retirees risk greater income insecurity as a result of long periods of joblessness during working age. In health care, structural measures that strip out unnecessary services and score efficiency gains are preferable to untargeted cuts that limit health care access for the most vulnerable.

Chapter 1 – The crisis and its aftermath: A "stress test" for societies and for social policies

Introduction

Social issues lie at the heart of governments" policy agendas. Before the onset of the financial and economic crisis in 2007-08, social spending across the OECD area accounted for about half of all government outlay. But while there is great demand for social protection and support in all phases of the economic cycle, the need is especially acute during and after deep and extended economic downturns. The recent global economic crisis is no exception, as it quickly translated into hardships for households, who suffered unprecedented losses of jobs, earnings, and wealth.

A primary purpose of social policies is precisely to help individuals and families cope with the consequences of economic shocks like the Great Recession and to prevent temporary economic problems from turning into long-term disadvantage. They should enable individuals and families to manage risks more effectively and take better advantage of opportunities. Economic shocks have multiple causes which social policies cannot prevent. They can, however, strengthen families" ability to adapt and respond to economic difficulties when they do occur. Income transfers, health care, and other public services make major shocks both less likely and less damaging. For society as a whole, social policies can prevent cyclical or temporary downturns from turning into protracted social crises.

Against that background, this chapter and the indicators in the rest of the book take stock of what is currently known about the social challenges that have emerged since the onset of the crisis and about countries" policy responses to those challenges. The book considers and discusses the most recent data on the social situation in OECD countries and in selected emerging economies. The aim of this chapter is to address the following three main sets of questions:

? Are the on-going financial, economic, and fiscal crises leading to a social crisis? How have social outcomes evolved in the aftermath of the global economic downturn? To answer those questions, Section 1 of this chapter goes beyond economic "headline" indicators -such as unemployment rates, incomes or GDP- that are commonly used as shorthand for characterizing and comparing the impacts of the crisis on individuals and families. As important as these aggregate indicators are, they account only very partially for the realities faced by individuals and families during and after a major downturn. The costs of recessions manifest themselves in a multitude of different ways. Deep economic crises can be expected to have profound knock-on effects on people"s living arrangements, family formation, fertility, health, career choices, or trust in others and in institutions. Understanding these is important not only for monitoring societal wellbeing, but also because social tensions and a shifting social fabric can trigger and drive fundamental social, cultural and political change (Castells et al., 2012).

? How have governments responded? Economic crises are characterized not only by worsening well-being, but also by great uncertainty and a search for solutions to acute policy problems. Have social policy responses been effective so far? To what extent have they cushioned the immediate effects of the crisis on households and have they succeeded in supporting families" efforts to adapt and respond to the resulting challenges? Economic difficulties put families under significant strain as they seek to contain, offset or adapt to insecure job prospects, the loss of earnings or wealth, precarious housing situations, or to waning public support. Section 2 of this chapter maps the evolution of social policies in OECD countries over the last five years and discusses their likely impact in the context of high and increasingly persistent social risks.

? Can governments make social policies more crisis-ready and crisis-proof? Specifically, what are barriers to an effective social policy response and how could they be overcome? The cross-country analysis in Section 2 reveals wide differences in the types and scale of countries" social policy responses. Such differences are also visible between countries who suffered economic shocks of similar magnitudes. It is not surprising, then, that some have been more successful than others in containing the social and human costs of the downturn. The third and final section seeks to identify factors that could explain why some countries have been able to provide adequate, timely help to families hit hard by the economic crisis. It then calls for a number of concrete measures that governments could take to enable more effective social policy responses to future economic crises.

• 1. Social outcomes in the wake of the economic crisis

• 2. Economic losses heighten social risks

The financial crisis in 2007-08 saw a fast, far-reaching deterioration in economic output for the OECD area as a whole and GDP fell steeply from its pre-recession peaks. But while in some countries, the Great Recession was followed by a moderate but continuous recovery, others avoided outright recession. A number of hard-hit countries, notably in Europe, faced a second recession in 2011-12 and output only began to stabilize in late 2013 (Figure 1.1). More than five years after the Great Recession started, economic output in the OECD is still not back to pre-crisis levels.

Of all the economic losses, however, the income drops suffered by workers have turned out to be the most difficult to reverse. In most countries, the recovery has not yet translated into significant improvements in labour market conditions. Employment and wages have continued to fall until recently (Figure 1.1).

In the worst-affected countries, labour income -households" most important income source- keeps on falling, in some instances at a gathering pace, even as GDP stabilizes. Most countries have experienced "jobless" recoveries and/or falling wages and it will take several more years for labour incomes to regain their pre-crisis levels. Where the erosion of earnings persists, consumers are unlikely to play much of a role in supporting an economic recovery.

The Great Recession thus continues to cast a particularly long shadow on workers and their families. To policy makers, the negative trends it has generated point to continuing economic hardship, a high risk of growing poverty, and a persistently strong demand for effective support.

The demand for social support has persisted despite a public awareness that something needs to be done about often-unprecedented debt levels and structural fiscal deficits. Figure 1.2 for instance, illustrates the findings from a 2013 survey which shows how, in some countries, attitudes have shifted markedly against government debt and in favour of spending cuts.

Most respondents in France, Italy, Portugal, and the United States supported lowering government expenditure, while in other countries -like the Netherlands, Poland, Sweden, Turkey, and the United Kingdom- people appear much less convinced that spending cuts should be a priority. Strikingly, though, large majorities support protecting or extending social spending, even in those countries where most people consider overall spending too high. That sentiment highlights the essential role of social support measures during and after deep economic downturns. However, concerns about the fiscal situation in some countries also underline the need for cost-efficient social protection and for the difficult task of "doing more with less".

Social risks are higher when hardship is concentrated in specific groups

Effective, efficient social support measures should be properly targeted and tailored to individual circumstances. To that end, understanding the distributional aspects of recessions is essential. The worsening of aggregate income and employment trends is striking and highlights the scale of the crisis. But aggregate numbers hide wide disparities across population groups and regions within countries. By averaging across diverse populations, they understate the difficulties faced by the worst-off.

Deep recessions do not strike symmetrically. Jobs in sectors that bore the brunt of the initial economic slump in the Great Recession, such as financial services, construction, and manufacturing, were particularly exposed. As reduced incomes and depressed product demand permeated the economy, more and more families were affected, even though the extent and duration of difficulties varied dramatically from one group to another.

Men, youth, and low-skilled workers in labour-market plight

Since 2007, non-employment rates have increased much more markedly among young people, men, and low-skilled workers than among women and older workers (Figure 1.3). The surge in non-employment, especially among youth and men, reflects a combination of increasing numbers of unemployed (those looking for jobs) and so-called labour-market inactive (including discouraged jobseekers who are no longer available for work or not actively looking).

Most affected by rising unemployment are low-skilled prime-age workers, while the doubling of the number of long-term unemployed in the OECD area to 17 million- one in every three jobless people- by the second quarter of 2013 is particularly worrying.

Growing numbers of people without recent work experience, depreciating skills, and employers" reluctance to hire them, swell the ranks of discouraged job seekers, i.e. those who want to work but no longer actively look for a job. Lengthening jobless spells make turning a hesitant recovery into a job-rich economic upswing much more difficult, and can lead to rising structural unemployment.

Women and older workers have fared somewhat better: their labour market participation had risen prior to the crisis and has mostly continued to do so. They were also less affected by unemployment. Women, for example, are typically overrepresented in the services and public sector that initially suffered less than male-dominated industries like manufacturing and construction. In addition, many inactive women resumed or entered work in an attempt to offset other household members" loss of earnings. Although the crisis had a less adverse effect on the employment situation of women, it spelled the end of the long-term upward trend in employment rates in OECD countries.

The collapse in young people"s employment opportunities is of particular concern because it leads to "scarring" -a term commonly used to describe how early working life difficulties can jeopardize long-term career paths and future earnings prospects. The share of youth not in employment, education or training (the so-called "NEETs") has gone up significantly in the OECD area since the onset of the crisis. By late 2012, it stood at 20% or more in Greece, Italy, Mexico, Spain and Turkey. The sharpest increases were recorded in countries hardest hit by the crisis (Estonia, Greece, Ireland, Portugal, and Spain) and in Italy, Luxembourg, and Slovenia. In the OECD area as a whole, the number of unemployed youth increased by some two million, with young men accounting for the bulk of the rise.

Public sector workers have initially fared better, despite consolidation efforts Governments plan fiscal savings in a wide range of policy domains (see Figure 1.6).The wage bill for general government employees in the average OECD country accounts for a large share of government expenditures (around 23% on average across the OECD). As a result, expenditure cuts across all functions of government have often included reductions in staff levels, pay or employee benefits; clearly, public-sector workers are not impervious to the general weakening of the labour market.

At the same time, however, an economic crisis translates into greater demand for social services and other types of labour-intensive public support (e.g. training, education, job-search assistance, and health care). Like other areas of government spending, such services are affected by the conflict that an economic and fiscal crisis generates between a greater need for public support and the reduced fiscal space for financing it. Large drops in staff levels, in particular, may compromise the capacity and quality of social support services.

Figure 1.4 illustrates how general government employment has indeed declined substantially in a number of countries such as Sweden, Italy, and the Slovak Republic. Yet, up to 2011, most countries had safeguarded their public sector jobs more effectively than those in the rest of the economy. Some -like Ireland, Spain, and Slovenia- had actually increased staff levels significantly compared with 2006. However, the latest available international data relate to 2011 and the changes depicted in Figure 1.4 reflect neither governments" more recent spending cuts nor their future consolidation plans.

Individual employment losses leave rising numbers of households with no labour income

The most commonly used statistics of labour-market difficulties refer to individuals rather than households. They therefore do not show how these individual labour-market problems translate into predicaments at the family level. Since 2007 the proportion of people living in households with no income from work has gone up in most countries, approximately doubling in Greece, Ireland and Spain and increasing by 20% or more in

Estonia, Italy, Latvia, Portugal, Slovenia, the United States (Figure 1.5). In debates on fiscal consolidation and other policy reforms, such households deserve special attention as they are particularly vulnerable and highly dependent on government support. With more than one in eight working-age individuals in most countries now living in workless households, the success of redistribution measures and active social policies is gauged to a large extent on whether they can improve economic security for families without any income from work.

Job losses concentrated in economically fragile regions

Geographic concentrations of labour-market disadvantage can threaten social cohesion. They also make it more difficult for governments to respond effectively because they pose greater challenges and because the more economically fragile regions are less able to raise adequate revenue. Regional disparities in unemployment were already high before the crisis (OECD, 2013e). In countries where the unemployment rate has mounted substantially since then, the rise in economically fragile regions has tended to be at least as bad as in the country as a whole. In other words, a large proportion of the increase in unemployment has affected regions where it was above average even before the crisis.

Economic hardship felt most acutely among low income earners and youth

The social impact of the crisis is reflected in the growing numbers of people who struggle to meet their basic needs. According to data from the Gallup World Poll, one in four respondents in the OECD area reported income difficulties in 2012, with the proportion climbing to three out of four in Hungary and Greece and one in two in the United States.

The incidence of reported trouble in making ends meet has been on the rise since 2007 in 26 countries, including some where social safety nets have played an important role in cushioning the impact of the crisis (e.g. the Nordic countries, France, and Germany).

Objective measures of household income show both that subjectively reported difficulties are real and that -once again- the burden of income losses has not been evenly shared.

At the onset of the crisis, falling capital incomes lowered top incomes while stimulus packages, along with often powerful automatic stabilizers, helped ease the pain of income losses at the lower end of the income distribution. As adverse economic conditions have persisted, however, lower income households have lost greater proportions of their incomes than the better-off or benefited less from the sluggish recovery -particularly in the hardest hit countries like Estonia, Greece, Ireland, Italy, and Spain, though not in Iceland where well-off households have sustained greater income losses than poor ones.

Across the OECD, the average income of the total population stagnated between 2007 and 2010, while that of the bottom 10% fell at an annual rate of 2%. Clearly, the crisis has worsened longer-term trends of rising income inequality (OECD, 2011), a finding that national studies have confirmed. More recent aggregate data from OECD national accounts and from national studies using household surveys (such as Cribb et al., 2013 on the United Kingdom) also show that total household incomes often continued to fall after 2010. As social spending comes under pressure from fiscal consolidation, there is a risk that incomes will continue to deteriorate for families with incomes below or close to the poverty line.

Measuring poverty against a relative poverty line suggests that, between 2007 and 2010, the average share of the poor in OECD countries grew only marginally, by 0.1 percentage points to 12%. One reason was that social benefits softened the impact of the crisis. But these commonly used relative poverty measures can be difficult to interpret in times of rapid economic change because the poverty line, which is expressed as a percentage of incomes in middle-class households, also moves. Even if those at the bottom of the income ladder suffer significant losses during a downturn, measured poverty might not increase when the average income -and thus the poverty line- falls as well, as often happens during a recession. A more direct way to measure losses at the bottom of the distribution is to take a poverty threshold "anchored" in a given year as the benchmark. This approach reveals a much steeper increase in poverty rates during the first three years of the crisis -as much as two percentage points or more in countries like Greece, Ireland, and Spain.

Thus, even before the bulk of fiscal consolidation programmes kicked in, half of all OECD countries were failing to hold back the rising tide in market income inequality and its impact on those living on incomes at or below the poverty line. However poverty is measured, growing economic hardship at the bottom of the income distribution is unlikely to be a mere "statistical" particularity, where some people shuttle from just above to just below poverty thresholds. Indeed, OECD income distribution data (not reported), together with results from national studies (such as Shaefer and Edin, 2013, for the United States), show that higher poverty rates were frequently accompanied by deepening poverty- a widening gap between families" incomes and the poverty line.

In a majority of OECD countries, young adults and families with children face considerably higher risks of poverty today than in 2007. The share of 18-25 year-olds in households where incomes are less than half the national median income has climbed in the vast majority of OECD countries between 2007 and 2010. Rises have been particularly steep in Estonia, Spain, and Turkey (5 percentage points), Ireland and the United Kingdom (4 points), and Greece and Italy (3 points). Lower-income older people did relatively better, as public pension benefits generally changed little and relative income poverty among the elderly fell in most countries. These changes follow a longer-term trend of falling poverty rates among the elderly. Averaged across OECD countries, the proportion of poor people is now, for the first time, lower among the elderly than among young adults and children.

What do these recent trends mean for longer-term inequality trends? Information from earlier downturns provides pointers as to the distributional mechanics which tend to be at work well into the recovery phase. Figure 1.6 offers just such a historical perspective on the income trends among low-, middle- and high-income households across earlier economic cycles. These trends are for market incomes, that is, before adding social transfers or subtracting taxes. By focusing on market income, Figure 1.6 indicates the space that redistribution policies have to bridge if they are to stem widening gaps between household incomes after taxes and government transfers. A number of patterns stand out:

? In spite of long periods of significant aggregate economic growth, low-income households saw market incomes decline over the periods shown in Figure 1.6. Joblessness can take market incomes to very low levels if all family members are without work. (When 10% or more of the population live in such households, the 10th percentile point will be close to zero.) Plummeting incomes during periods of rapidly rising joblessness were, for instance, observed in the early 1990s following the recessions in Australia and the United Kingdom, and during the economic transition in Poland.

? Among higher-income groups, any disruptions in longer-term upward trends were short-lived during the downturns of the early 1980s and 1990s.

? Market-income inequalities widened in most countries during both downturns and upswings. When incomes at the bottom fell rapidly during and after recessions, incomes in the upper parts of the distribution often continued to rise, albeit at a slower pace. And even where downturns did result in longer-lasting income losses for higher-income groups (as in Australia, Finland and Poland), they nevertheless tended to be smaller than for low earners.

? Any episodes of narrowing income differentials did not usually last long enough to offset the gap between high and low incomes that had opened up in preceding years.

? These historical trends point in similar directions as data available for the most recent downturn (Cribb et al., 2013; Hoynes et al., 2012). For instance, Hoynes et al. show that, as in earlier recessions, those who are unemployed or in unstable jobs even in good times are, yet again, the main losers in the Great Recession. As they put it with reference to the distribution of jobs and earnings losses, "the Great Recession is different from (earlier) business cycles (…) in size and length, but not in type".

Economic hardship carries serious consequences for families and society as a whole

Economic hardship has a highly tangible impact on well-being and, when they can, households actively adapt to these adverse circumstances. Some types of responses, such as drawing down savings or reducing non-essential consumption, limit negative long-term effects of income losses. But severe, long-lasting economic travails can overwhelm families" capacity to adapt effectively. Unless there is sufficient public support, they may be forced to cut down on essential consumption, such as food, shelter, and health care. They may also have to curtail investment in their future well-being by, for example, interrupting or cutting short education or training.

Poor households with little savings are more likely to have to resort to coping strategies that are damaging in the long term. Social support measures and policies that ensure adequate access to credit are essential to such households, enabling them to "push through" temporary low-income spells.

Good-quality education may become less affordable as governments spend less

Weak labour markets can make staying on in education a more attractive prospect: opportunity costs -immediate foregone earnings- are lower, which can translate into higher educational attainment (OECD, 2013a; Holzer and Dunlop, 2013).

A good education is expensive, however, and lower wealth, incomes, and profits may affect people"s ability and readiness to invest in education and training (Lovenheim, 2011). To compound matters, fiscal restraint inhibits the provision of the additional resources needed to absorb greater student numbers and maintain quality (Barr and Turner, 2013). Indeed, consolidation efforts halted the long-term trend of rising public spending on education: it declined relative to GDP between 2009 and 2010 in more than half of OECD countries, with cuts especially sharp in Hungary, Iceland, Italy, Sweden, Switzerland, and the United States. Such reductions in public spending are likely to make good-quality education more costly for lower-income households in particular.

The consequences of lower public spending on education will take time to materialize, be it in the form of lower student participation, poorer outcomes, or reduced upwards mobility for children of low-income parents. But, as with cuts in other areas of public investment, it is precisely the longer-term consequences that can be most damaging.

Health outcomes may deteriorate

Difficult economic conditions, people"s behavioural responses to them, and health policy changes may all have impacted on people"s health. There remains, nevertheless, considerable uncertainty as to the net effects of the crisis in the short- and the longer term. At the aggregate country-wide level, studies that consider such broad measures as mortality often find that recessions exert positive short-run effects on health (i.e. mortality is lower). At the same time, there is strong evidence of negative effects on individuals most affected by downturns (unemployed working-age people), especially over the long term (Vangool, 2014).

Indeed, the different ways in which people react to economic downturns have sometimes opposite health effects. For instance, reduced economic activity can curb pollution and lower the risk of road traffic accidents -fatalities on the roads have in fact declined in recent years (OECD, 2013h). Lower incomes may also reduce expenditure on alcohol or tobacco in some groups. At the same time, however, economic troubles can lead to increased substance abuse, anxiety, antisocial behaviour, poor diets, and generally less healthy lifestyles (Catalano, 2009).

Reduced spending on food is one of the main causes of food insecurity, a term that describes a situation where inadequate access to food does not allow all members of a household to sustain a healthy lifestyle.8 In the United States, where the incidence of food insecurity is monitored on a regular basis, rates of food insecurity have soared since 2007 (Coleman-Jensen et al., 2013).

While federal food assistance programmes in the United States now support roughly twice as many households as in 2007, the number with inadequate access to food at some time in the year has nonetheless climbed from 13 million (11% of all households) in 2007 to 17.6 million (15%) in 2012. Rates of food insecurity were substantially higher among households with children (20% in 2012) and lone-parent families were particularly affected (35%). Forty-one percent of all food-insecure households received no support through federal food assistance programmes.

While there are no internationally comparable statistics on food insecurity that are as detailed as those of the United States, some unofficial estimates indicate that growing numbers of families and children suffer from hunger or food insecurity in economically distressed countries. Some 10% of students in Greece fall into that category according to Alderman (2013). The Gallup World Poll includes a question on whether respondents feel that they have "enough money to afford food". Responses confirm that rising numbers of families in OECD countries may have less money to spend on food and a healthy diet. By contrast, while large shares of people in the large emerging economies feel that they cannot afford adequate nutrition, their numbers have mostly declined since 2007 (Figure 1.7).