Inequality is a problem in itself but also a challenge to the eradication of extreme poverty (and fulfilment of the SDGs, and prior to this, the MDGs) (UNICEF et al., 2014; Kabeer, 2010). Inequality is important to poverty because the relative position of individuals or households in society is considered an important aspect of their welfare (Coudouel et al., 2002). There are heated debates about whether efforts to reduce poverty can be successful without addressing inequality (UNICEF & UN Women, 2013) or whether these merely address the symptoms but not the cause. For example a recent GSDRC Topic Guide on inclusive growth finds that ‘country-specific case studies find a strong and complex relationship between growth and inequality, which can be obscured by cross-country studies’ (Alexander, 2015). In addition, ‘there is some consensus that marked high inequality reduces the rate at which the income of the poor increases in relation to that of the rich, and some emerging evidence that more equal distribution of income is associated with longer periods of growth’ (Alexander, 2015).
There is a tentative consensus in the literature that inequality tends to reduce the pace and durability of growth (Ostry et al., 2014). Research by the World Bank indicates that when markets are imperfect (in credit, insurance, land and human capital), inequalities in power and wealth turn into unequal opportunities, leading to wasted productive potential and to an inefficient allocation of resources (World Bank, 2006; World Bank, 2013). Unequal power is found to lead to the formation of institutions that perpetuate inequalities in power, status, and wealth, which typically are also bad for the investment, innovation, and risk-taking that underpin long-term growth (World Bank, 2006). Recent research suggests that unless inequality is tackled it leads to further and growing economic inequality as gains on capital are greater than those from income (Piketty, 2014). Inequalities have also been found to undermine social cohesion (UNDP, 2013). Research indicates that the presence of large horizontal inequalities, which are economic, social, political and cultural status inequalities among salient identity groups, are especially likely to increase the risk of violent conflict (Stewart, 2010). Thus inequalities can prevent the reduction of poverty and can increase political and social tensions (Poverty Analysis Discussion Group, 2012; UNICEF & UN Women, 2013; Ortiz & Cummins, 2011; UNDESA, 2013; UNICEF et al., 2014; Kabeer, 2010; World Bank, 2013).
Inequality undermines social justice and human rights and the interconnectedness of inequalities means some groups have consistently worse opportunities than those of their fellow citizens (UNDP, 2013; World Bank, 2006). Among the most common group identities resulting in exclusion are gender, race, caste, ethnicity, religion, region, and disability status, although more evidence is needed (World Bank, 2013). Inequalities have resulted in the poorest sections of the world’s population, including many women, youth, older persons, persons with disabilities, indigenous peoples and rural populations, making less progress towards the MDGs (Kabeer, 2010; World Bank, 2013). Even people at the higher end of the income distribution may face social exclusion through political persecution or discrimination based on age, gender, sexual orientation, or disability (World Bank, 2013). Excluding these groups has had substantial social, political, and economic costs for the groups themselves and wider society (World Bank, 2013). The poor often face discrimination, stigma and negative social stereotypes that reduce their social participation and opportunities for employment, and reduce political support for targeted measures (UNICEF & UN Women, 2013). Partially as a result, there are large differences in the education, health and nutrition of households of different wealth levels within countries (UNDP, 2013). Inequalities between classes (large-scale groupings of people identified according to economic criteria) have widened both within and between countries (Greig et al., 2006). Class intersects with gender, ethnicity and other identities to compound poverty and inequality (Greig et al., 2006).
An increasing body of evidence indicates that people with disabilities often face inequalities in all areas of life (comparatively lower educational attainment, higher unemployment rates, worse living conditions, and higher poverty rates, for example) (Mitra at al., 2013; UNICEF & UN Women, 2013; UNDESA, 2013). People with mental health problems face high rates of physical and sexual abuse, and restrictions in their access to rights, services and livelihoods (Cain, 2012).
Some evidence indicates that many older people are routinely denied access to resources and services as a result of age-based discrimination (UNICEF & UN Women, 2013; UNDESA, 2013; Cain, 2012). Studies have found that there are more children on average in the poorest households and thus they are more exposed to economic inequalities than adults (UNICEF & UN Women, 2013). Girls and children with disabilities are especially disadvantaged (UNICEF & UN Women, 2013; see also Ortiz & Cummins, 2011). In many countries, youth are increasingly disadvantaged in terms of relative income, unemployment, and working poverty (UNDESA, 2013).
Evidence shows that, despite significant progress in education (and in some countries males’ average years of education and secondary enrolment rates now falling below that of females), and some progress in health outcomes, many women still have less access to livelihoods (UNDP, 2013). The most marginalised are girls and women who are poor, live in remote areas, are disabled, or belong to minority groups (World Bank, 2012). Prejudice, negative stereotypes and intolerance against gay, lesbian, bisexual, and transgender people often results in violence and discrimination against them (UNICEF & UN Women, 2013; World Bank, 2013).
Some empirical evidence gathered by the International Poverty Centre suggests that developing countries with less gender inequality tend to have lower poverty rates (IPC, 2008). Inequality also increases the vulnerability of societies and of particular marginalised groups to economic crises and prolongs the time it takes to recover from such crises (UNDESA, 2013).
Research gathered by UNICEF and UN Women (2013) indicates that individuals and groups suffering multiple rights deprivations often face inequalities compared to others in society. Inequality is often intersecting – for example, the social inequality experienced by disadvantaged groups can lead to economic inequality (Kabeer, 2010; UNDESA, 2013). There is a lot of overlap between those affected by poverty and those negatively affected by inequality. Lack of political power can be both the cause and result of these inequalities (UNDESA, 2013). It is important to recognise and address these group inequalities because they make up a large part of overall and persistent inequalities within countries (UNDESA, 2013).
Research by the UN Secretariat’s Division for Social Policy and Development (2013) suggests that income inequality leads to uneven access to health and education. This is particularly the case for children (Ortiz & Cummins, 2011). This in turn leads to ‘the intergenerational transmission of unequal economic and social opportunities, creating poverty traps, wasting human potential, and resulting in less dynamic, less creative societies’ (UNDESA, 2013, p. 22).
Inequalities can also have a negative impact on almost all in society. Evidence gathered by Wilkinson and Pickett (2009) shows that more unequal societies experience more social and environmental problems across the whole population than more equal societies.
- Cain, E. (2012). Voices of the marginalized: Persons with disabilities, older people, people with mental health Issues. UN Women & UNICEF.
- Coudouel, A., Hentschel, J. S., & Wodon, Q. T. (2002). Poverty measurement and analysis. In The PRSP Sourcebook. Washington, DC: World Bank.
- Greig, A., Hulme, D., & Turner, M. (2006). Class. In D. Clark (Ed.), The Elgar companion to development studies. Cheltenham, UK: Edward Elgar.
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