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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
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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
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Richard Wilkinson Emeritus Professor of
Social Epidemiology
University of Nottingham
&
Kate Pickett Professor of Epidemiology
University of York
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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
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Among the rich countries life expectancy is not related to
national differences in average income
Source: Wilkinson & Pickett, The Spirit Level (2009)
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Life Expectancy is related to inequality in rich countries
Source: Wilkinson & Pickett, The Spirit Level (2009)
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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
Source: Wilkinson & Pickett, The Spirit Level (2009)
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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
Source: Wilkinson & Pickett, The Spirit Level (2009)
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Child-Wellbeing is Unrelated to Average Incomes in Rich
Countries
Source: Wilkinson & Pickett, The Spirit Level (2009)
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Child Well-being is Better in More Equal Rich Countries
Source: Wilkinson & Pickett, The Spirit Level (2009)
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Levels of Trust are Higher in More Equal Rich Countries
Source: Wilkinson & Pickett, The Spirit Level (2009)
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Finland today – the two sides of the coin
08/11/2011 Presentation name / Author 12
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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
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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
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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
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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
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19
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19
94
19
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19
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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.
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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
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Gini-coefficient of income inequality in OECD countries, mid-2000
08/11/2011 18
Sources: Growing Unequal? OECD, 2008
EU-average ca. 30 %
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Point changes in the Gini coefficient mid-1980 to mid-2000 in OECD countries
08/11/2011 19
Sources: Growing Unequal? OECD, 2008
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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
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10
*
Beneficiaries Long-term beneficiaries Expenditures
Million euros Persons
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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
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Life expectancy in the Nordic countries 2001-2010, females Source: Eurostat 2011
08/11/2011 Presentation name / Author 22
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Life expectancy in the Nordic countries 2001-2010, men Source: Eurostat 2011
08/11/2011 Presentation name / Author 23
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Total fertility rate in the Nordic countries 2001-2010 Source: Eurostat 2011
08/11/2011 Presentation name / Author 24
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Infant mortality in the Nordic countries 2001-2010 (/1000 live births) Source: Eurostat 2011
08/11/2011 Presentation name / Author 25
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Employment rate in the Nordic countries 2000-2010, age group 20-64, target 75 % (Source: Eurostat 2011)
08/11/2011 Presentation name / Author 26
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Long-term unemployment in % of active population in the Nordic countries 2001-2010 Source: Eurostat 2011
08/11/2011 Presentation name / Author 27
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Youth unemployment rate % of youth labour force (15-24) in the Nordic countries 2003-2010 Source: OECD 2011
08/11/2011 Presentation name / Author 28
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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
08/11/2011 Presentation name / Author 29
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Young people aged 18-24 not in employment and not in any education and training in the Nordic countries 2008-2010, % Source: Eurostat 2011
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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
08/11/2011 Presentation name / Author 31
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Gender pay gap in the Nordic countries 2006-2009 Source: Eurostat 2011
08/11/2011 Presentation name / Author 32
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
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People at-risk-of-poverty (%) in the Nordic countries 2001-2009/10 Source: Eurostat 2011
08/11/2011 Presentation name / Author 33
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Less than 16 years old population at-risk-of poverty or social exclusion (%) in the Nordic countries 2004-2009/10 Source: Eurostat 2011
08/11/2011 Presentation name / Author 34
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Materially deprived people (%) in the Nordic countries 2003-2010 Source: Eurostat 2011
08/11/2011 Presentation name / Author 35
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Live births per 1000 15-19 years old women in the Nordic countries 2000-2008 Source: Nososco 2011
08/11/2011 Presentation name / Author 36
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Death due to homicide, assault in the Nordic countries 2000-2009 (Standardized death rate by 100 000 inhabitants) Source: Eurostat 2011
08/11/2011 Presentation name / Author 37
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Death due to drug dependence in the Nordic countries 2000-2009 (Standardized death rate by 100 000 inhabitants) Source: Eurostat 2011
08/11/2011 Presentation name / Author 38
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Death due to alcoholic abuse in the Nordic countries 2000-2009 (Standardized death rate by 100 000 inhabitants) Source: Eurostat 2011
08/11/2011 Presentation name / Author 39
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Death due to suicide in the Nordic countries 2000-2009 (Standardized death rate by 100 000 inhabitants) Source: Eurostat 2011
08/11/2011 Presentation name / Author 40
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Prison population rate in the Nordic countries 2001, 2004 and 2009 (per 100 000 inhabitants) Source: OECD 2011
08/11/2011 Presentation name / Author 41
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Self-reported obesity in the Nordic countries 2000-2009 (adult population with a BMI>30) Source: OECD 2011
08/11/2011 Presentation name / Author 42
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Long-term care in percent of the age groups 65 years or more 2000-2008/2009 (NOSOSCO 2010)
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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
08/11/2011 Presentation name / Author 44
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Source: Wilkinson & Pickett, The Spirit Level (2009)
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
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Average Rank of Finland from 0 – 3 compared with other Nordic countries
Source: Wilkinson & Pickett, The Spirit Level (2009)
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.
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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
08/11/2011 Presentation name / Author 47
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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
08/11/2011 Presentation name / Author 48
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A vision of a better society:
Beveridge fighting the five evils
Still valid?
Which weapons?
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Thank You!
08/11/2011 Presentation name / Author 50