Marja Vaarama: Development of inequality in Finland according to some social indicators from...

Development of inequality in Finland according to some social indicators from 1990’s up

today

Inequality and the Nordic Welfare Model –seminar

7th November 2011, Helsinki

Marja Vaarama

[email protected] 08/11/2011 Inequality in Finland / Marja Vaarama 1

Contents

• Nordic Welfare Model in an international comparison (data varies between the years 1998- 2004)

– A quick look at Wilkinson & Picket 2009

• Finland today – the two sides of the coin

• What happened after W&P - Finnish welfare state in a Nordic comparison in the years 2000-2010

• Eurostat 2011, Nososco 2010

• Summing up - an average comparison of Finland with other Nordic countries based on W&P

• Discussion

08/11/2011 Presentation name / Author 2

Richard Wilkinson Emeritus Professor of

Social Epidemiology

University of Nottingham

&

Kate Pickett Professor of Epidemiology

University of York

General message of W&P:

Almost everyone benefits from

greater equality

Usually the benefits are greatest

among the poor, but extend to the

majority of the population

Overall result: Nordic countries are

most equal in the comparison

Among the rich countries life expectancy is not related to

national differences in average income

Source: Wilkinson & Pickett, The Spirit Level (2009)

Life Expectancy is related to inequality in rich countries


Health and Social Problems are not Related to Average Income in Rich Countries

Index of:

• Life expectancy

• Math & Literacy

• Infant mortality

• Homicides

• Imprisonment

• Teenage births

• Trust

• Obesity

• Mental illness – incl.

drug & alcohol

addiction

• Social mobility


Index of:

• Life expectancy

• Math & Literacy

• Infant mortality

• Homicides

• Imprisonment

• Teenage births

• Trust

• Obesity

• Mental illness – incl.

drug & alcohol

addiction

• Social mobility

Health and Social Problems are Worse in More Unequal Countries


Child-Wellbeing is Unrelated to Average Incomes in Rich

Countries


Child Well-being is Better in More Equal Rich Countries


Levels of Trust are Higher in More Equal Rich Countries


Finland today – the two sides of the coin


THL 13

Finnish welfare state – a success story? • According to international rankings – yes (Wilkinson & Pickett 2009,

also e.g. Yee & Chang 2009, Veenhoven 2010, Newsweek 2010)

• High level of wellbeing and social quality of the society

• Low level of poverty and material deprivation. One of the lowest income inequalities in OECD countries

• High equality of opportunity: high level of intergenerational income and social mobility

• High gender equality: single and married women have same employment rate, gender wage gap 15-20%

• Lowest infant mortality and teenage pregnancy in the world. “Relatively” high fertility rate of 1.84

• One of the least corrupted country in the world

• Public services produce “top results with average spending”

• Top placing at Education Index (UN) and Children’s literacy (PISA/OECD)

• Competitive and adaptive economy with skilled workforce

THL 14

Our problem: Increasing disparities since the Great Depression of 1990’ies

• Socioeconomic differences in health and mortality large and getting bigger

• Long-term unemployed remained high after the 1990s

• Level of basic security left behind average earning by 30-40% in the last two decades. Social assistance become long-term for many

• Relative (child) poverty and income inequalities increased

• Alcohol related deaths increased by twofold since 1997

• Use of mental health services fourfold since 1997

• Number of children in custody almost twofold since 1991

• 10% of youth categorized as school dropouts

• Youngsters aged 18-24 with low education and unemployment, disability pensioners, and frail older people 80+ most vulnerable for low life quality

15

Mortality increases continuously as income diminishes

Relative mortality

0,0

0,5

1,0

1,5

2,0

2,5

1

Suurituloisin

2 3 4 5 6 7 8 9 10

PienituloisinIncome deciles

Naiset

Miehet

Source: Martikainen P. et al. Int J Epid 2001;30:1397-1405

Mortality of men aged 30 or over in the lowest income decile

is 2.4 times higher than in the highest decile, among women

the difference is 1.7-fold

Women

Men

Lowest Highest

8.11.2011 THL 16

0

2

4

6

8

10

12

14

16

18

20

50

55

60

65

70

75

80

85

90

95

100

19

89

19

90

19

91

19

92

19

93

19

94

19

95

19

96

19

97

19

98

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

*

Un

em

plo

ym

en

t ra

te %

Em

plo

ym

en

t ra

te %

Employment rate Unemployment rate

Employment and unemployment in Finland 1989-2010

Source: Statistics Finland. Labour Force Survey.

Relative (child) poverty rate and inequality GINI (%) 1966-2010 in Finland

8.11.2011 THL 17

* Year 2010 is a microsimulation estimation.

Source: Statistics Finland. TUJA-model.

0

5

10

15

20

25

30

35

0

5

10

15

20

25

30

35

1966

1971

1976

1981

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010*

Relative poverty rate Child poverty rate Inequality GINI

Gini-coefficient of income inequality in OECD countries, mid-2000

08/11/2011 18

Sources: Growing Unequal? OECD, 2008

EU-average ca. 30 %

Point changes in the Gini coefficient mid-1980 to mid-2000 in OECD countries

08/11/2011 19

Sources: Growing Unequal? OECD, 2008

8.11.2011 THL 20

Social assistance expenditures and beneficiaries 1985-2010

* Year 2010 long-term beneficiaries is an estimate. Source: Social Assistance,

THL.

0

100

200

300

400

500

600

700

0

100 000

200 000

300 000

400 000

500 000

600 000

700 000

19

85

19

86

19

87

19

88

19

89

19

90

19

91

19

92

19

93

19

94

19

95

19

96

19

97

19

98

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

*

Beneficiaries Long-term beneficiaries Expenditures

Million euros Persons

Finland in a Nordic comparison with 21 indicators of W&P and one extra (care of older people) in the years 2000-2010

• Most of the indicators studied here have been developed in Finland to a positive direction during the last 10 years

• Still most of the indicators demonstrate for Finland lower performance than in other Nordic countries

• Most negative development has occurred in employment, exclusion of young people, development of poverty risk, increasing obesity and in the care supply for older people

08/11/2011 BiggestPresentation name / Author 21

Life expectancy in the Nordic countries 2001-2010, females Source: Eurostat 2011


Life expectancy in the Nordic countries 2001-2010, men Source: Eurostat 2011


Total fertility rate in the Nordic countries 2001-2010 Source: Eurostat 2011


Infant mortality in the Nordic countries 2001-2010 (/1000 live births) Source: Eurostat 2011


Employment rate in the Nordic countries 2000-2010, age group 20-64, target 75 % (Source: Eurostat 2011)


Long-term unemployment in % of active population in the Nordic countries 2001-2010 Source: Eurostat 2011


Youth unemployment rate % of youth labour force (15-24) in the Nordic countries 2003-2010 Source: OECD 2011


Early leavers from education and training in Nordic countries 2000-2010 (Percentage of the population aged 18-24 with at most lower secondary education) Source: Eurostat 2011


Young people aged 18-24 not in employment and not in any education and training in the Nordic countries 2008-2010, % Source: Eurostat 2011

People living in households with very low work intensity in the Nordic countries 2004-2009/10 (Adults worked less than 20 % of their work potential during the year) Source: Eurostat 2011


Gender pay gap in the Nordic countries 2006-2009 Source: Eurostat 2011


Obs. No of completed working hours does not differ between e.g. Sweden and Finland,

but other Nordic Countries have more part-time workers than Finland

People at-risk-of-poverty (%) in the Nordic countries 2001-2009/10 Source: Eurostat 2011


Less than 16 years old population at-risk-of poverty or social exclusion (%) in the Nordic countries 2004-2009/10 Source: Eurostat 2011


Materially deprived people (%) in the Nordic countries 2003-2010 Source: Eurostat 2011


Live births per 1000 15-19 years old women in the Nordic countries 2000-2008 Source: Nososco 2011


Death due to homicide, assault in the Nordic countries 2000-2009 (Standardized death rate by 100 000 inhabitants) Source: Eurostat 2011


Death due to drug dependence in the Nordic countries 2000-2009 (Standardized death rate by 100 000 inhabitants) Source: Eurostat 2011


Death due to alcoholic abuse in the Nordic countries 2000-2009 (Standardized death rate by 100 000 inhabitants) Source: Eurostat 2011


Death due to suicide in the Nordic countries 2000-2009 (Standardized death rate by 100 000 inhabitants) Source: Eurostat 2011


Prison population rate in the Nordic countries 2001, 2004 and 2009 (per 100 000 inhabitants) Source: OECD 2011


Self-reported obesity in the Nordic countries 2000-2009 (adult population with a BMI>30) Source: OECD 2011


Long-term care in percent of the age groups 65 years or more 2000-2008/2009 (NOSOSCO 2010)

Summing up - an average comparison of Finland with other Nordic countries • Re-interpretation of the W&P results in comparison

with Nordic countries around 2000/2001

• using selected 4 dimensions of social sustainability

– Social security, social inclusion, social empowerment, social cohesion

• The results of this simple comparison demonstrates for Finland

– relatively good performance in social empowerment

– but lowest performance in social security and social cohesion



The four dimensions of Social Sustainability

1. Social empowerment

Indicators of achievement in education, health and

administration

5 indicators with average rank 2 (out of 3)

e.g. child mortality, mathematics/literacy in school (PISA)

2. Social security

Indicators of social security and employment

7 indicators with average rank 0,14 (out of 3)

e.g. income, employment

3. Social inclusion

Indicators of inequality and social justice

7 indicators with average rank 1 (out of 3)

e.g. income inequality, gender gap

4. Social cohesion

Indicators of social problems

12 indicators with average rank 0,8 (out of 3)

e.g. happiness, suicide

Average Rank of Finland from 0 – 3 compared with other Nordic countries


social

inequality/inclusion

social

problems/cohesion

social security social achievement

/empowerment

0,14

1,00 0,8

2,00

3,00

3,00

3,00

3,00

Note: Finland gets 1 point for each country with a lower rank. The

average rank is calculated over 5 – 12 indicators/dimension.

Discussion • Since the W&P analyses the development in our country has been

in many indicators positive, but in many also toward increasing inequality

• Among Nordic Countries, Finland gets lowest ranks in social security, social inclusion and social cohesion

• Income inequality has been increasing in Finland but the same happened also in other Nordic countries – still, other Nordic countries have not faced similar negative development as Finland

• WHY?

• Lower GDP, lower employment rate and structural unemployment explain a lot, and to improve the situation we need to find new ways to improve the employment rate

• But we need also to create better understanding of other factors and mechanisms that lead to inequality - and maybe we can learn from other Nordic countries how to improve social inclusion and cohesion

• The new government aims at fighting against inequality, and we of course hope that it will change this undesired development – this we need also to follow up


Jyrki Katainen’s government program, three major goals

1. Reducing poverty, exclusion and health inequalities

2. Balancing the public economy

3. Increasing inclusion, labour market participation and prolonging the working careers

Health and wellbeing perspective must be included in all decision making across the entire public administration

Ecological, economical and social sustainability of the Finnish Welfare Society is the goal, and this calls for integrated, comprehensive policies


A vision of a better society:

Beveridge fighting the five evils

Still valid?

Which weapons?

Thank You!


Marja Vaarama: Development of inequality in Finland according to some social indicators from...

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