Poverty and Equality of Opportunity three pictures to motivate - - PowerPoint PPT Presentation

Poverty and Equality of Opportunity

three pictures to motivate policy for social mobility Miles Corak

Department of Economics, and Stone Center on Socio-Economic Inequality The Graduate Center, City University of New York MilesCorak.com @MilesCorak Presentation to Public Economics Forum Melbourne Institute of Applied Economic and Social Research National Portrait Gallery, Canberra, Australia November 26th, 2019

• 1. Social mobility varies across countries

incomes are stickier across generations where inequality is higher

20 25 30 35 40 10 20 30 40 50 Higher Inequality (disposable income Gini in parent's generation) Fraction of inequality passed on to the next generation (%)

AUS AUT BEL CAN CHE DEU DNK ESP FIN FRA GBR GRC IRL ITA JPN KOR LUX MEX NLD NZL NOR PRT SVN SWE USA

• 2. Bottom half income inequality drives social mobility

OECD child poverty rates average 13%, but vary significantly

percentage points below average percentage points above average

2.9 3.7 7 7.1 7.2 7.3 9.1 9.2 9.5 9.6 9.9 10.2 10.5 11 11.2 11.3 11.3 11.8 12.1 12.2 13 13.4 14.1 14.8 15.5 16.3 17.1 18.9 19.3 19.7 19.9 21.1 22.1 23.2 25.3

Denmark Finland Slovenia Korea Iceland Norway Sweden Ireland Germany Austria Switzerland Netherlands Czech Republic Belgium United Kingdom France Luxembourg Hungary Estonia Latvia Australia Poland New Zealand Slovak Republic Portugal Japan Canada Greece Italy Mexico United States Chile Spain Israel Turkey

Twenty−one countries had child poverty rates below the OECD average in 2015, with Finland and Denmark about 10 percentage points lower. Fourteen countries had child poverty rates above the OECD average in 2015, including Canada. −10 −5 13.1 % +5 +10

• 3. Canada’s poverty reduction strategy has three elements

the first sets targets to monitor progress

2000 2005 2010 2015 2020 2025 2030

Canada's official rate of income poverty has fallen

below one−in−ten for the first time, going below the interim target

During 2015 the Rate of Income Poverty was 12.1% and in 2017 it fell to 9.5% just below the 2020 target of 10% set in Canada's Poverty Reduction Strategy but still a way to go before reaching the 2030 target of 6%

Source: MilesCorak.com using Statistics Canada data on the Market Basket Measure

• 3. Canada’s poverty reduction strategy has three elements
• 1. An official poverty line and targets

◮ sets an official poverty line and establishes targets for poverty reduction

• 2. Supporting indicators

◮ conditions the nature of the reduction with three sets of supporting indicators

• 3. A “contract” with future governments

◮ embeds poverty reduction into the longer term horizon for successive governments

Miles Corak @MilesCorak

Figure 1: Official poverty indicator

Figure 2: Supporting indicators: Dignity and basic needs.

Figure 3: Supporting indicators: Opportunity and inclusion.

Figure 4: Supporting indicators: Resilience and security.