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).