Inequality

• Published in: Perspectives on Global Development 2012 pp. 93 - 123
• Format: Book Chapter
• Language: English
• Published: Paris OECD Publishing 21.11.2011
• Series: Perspectives on Global Development
• ISBN: 9264113142; 9789264113145
• ISSN: 2222-4467; 2222-4475
• DOI: 10.1787/persp_glob_dev-2012-8-en

An equitable distribution of living standards is a central pillar of cohesive societies. Although shifting wealth has brightened the prospects for global income distribution, the transformation of the global economy raises key distributional challenges for social cohesion. A cohesive society reduces inequality between groups and ensures that all citizens – the poor, the middle-earners, and the rich – are socially included. Building a common understanding of what constitutes an adequate standard of living – and how to help those members of society who do not reach it – is an integral part of building a cohesive society. Understanding the complex interactions between opportunities, endowments, and market outcomes underlying distributional change is necessary to the establishment of a development strategy that takes into full account the specific needs and characteristics of a country. Education can help by addressing inequality of both outcomes and opportunities – raising the minimum level of education can offset inequality-increasing pressures originating from the structural changes that shifting wealth has brought with it. Preferences for redistribution as a means of reducing inequality differ from country to country and change over time – understanding how is an additional challenge for policy makers trying to build social cohesion.