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OECD (2011a), How's Life?: Measuring Well-being, OECD Publishing. doi: 10.1787/9789264121164-en OECD (2011b), Together for Better Public Services: Partnering with Citizens and Civil Society, OECD Public Governance Reviews, OECD Publishing. doi: 10.1787/9789264118843-en OECD (2011c), OECD Regional Outlook 2011: Building Resilient Regions for Stronger Economies, OECD Publishing. doi: 10.1787/9789264120983-en OECD (2011d), User-centred regulation: Open government and e-rulemaking, presented during the fourth meeting of the OECD Regulatory Policy Committee, April 2011.
OECD (2011e), OECD Territorial Reviews: The Gauteng City-Region, South Africa 2011, OECD Publishing. doi: 10.1787/9789264122840-en OECD (2012a), Redefining “Urban”: A New Way of Measuring Metropolitan Areas, OECD Publishing.
doi: 10.1787/9789264174108-en OECD (2012b), OECD Territorial Reviews: The Chicago Tri-State Metropolitan Area, United States 2012, OECD Publishing. doi: 10.1787/9789264170315-en OECD (2012c), Evaluating Laws and Regulations: The Case of the Chilean Chamber of Deputies, OECD Publishing. doi: 10.1787/9789264176263-en OECD (2012d), “Guía para mejorar la calidad regulatoria de trámites estatales y municipales e impulsar la competitividad de México” (Guide for improving state and municipal regulatory quality and promoting competitiveness in Mexico), OECD Publishing.
OECD (2013b), Government at a Glance 2013, OECD Publishing. doi: 10.1787/gov_glance-2013-en OECD (2013c), Policy findings and workshop proceedings, 5th Expert Workshop on Measuring Regulatory Performance 3-4 June 2013, Stockholm, Sweden.
OECD (2013d), Investing Together: Working Effectively across Levels of Government, OECD Publishing.
OECD (2013e), Fiscal Federalism 2014: Making Decentralisation Work, OECD Publishing. doi:
10.1787/9789264204577-en OECD (2013f), Malaysia Good Regulatory Practices, Interim Report (unpublished) OECD (2013g), “Investing in Trust: Leveraging Institutions for Inclusive Policy Making,” paper presented to the 47th OECD Public Governance Committee.
OECD (2014a), “OECD Best Practice Principles on Governance of Regulators”.
OECD (2014b), “Women, Government and Policy Making in OECD Countries: Fostering Diversity for Inclusive Growth,” OECD Publishing, Paris.
OECD (forthcoming, a), “Citizen Engagement and Supreme Audit Institutions: A Stocktake” OECD (forthcoming, b), “Social media use by governments: a policy primer to discuss trends, identify opportunities and guide decisions”, OECD, Paris.
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1. The Gini coefficient is a standard measure of inequality, where zero means everybody has the same income and 1 means the richest person has all the income..
2 While in principal corporate income is fully redistributed in the long term, the rise in corporate saving, as well as the treatment of capital gains from re-invested profits, including abroad, may explain part of the discrepancy between growth in GDP and household income (Causa et al., 2014).
3 A non-exhaustive list of papers on the shrinking of the US middle class includes Blackburn and Bloom (1985), Duncan et al. (1991), Levy (1987a and 1987b), Horrigon and Haugen (1988), Bradbury (1986) and Thurow (1984). Recent papers that have covered European countries include Grabka and Frick (20008).
Goos and Manning (2007) provides a country perspective on Germany and Pressman (2007) on the UK.
Ravallion (2010) focuses on developing countries.
4 Whereas the incidence of poverty is conventionally measured by the headcount of individuals or households with incomes below the poverty line, the depth of poverty can be gauged by the shortfall between the average income of the poor and the poverty line. The poverty gap is calculated as the distance between the poverty threshold and the mean income of the poor, expressed as a percentage of the poverty threshold.
5 Preliminary estimates indicate that the 1990 extreme poverty rate—based on the international poverty line of USD 1.25 a day (in 2005 prices)—was actually halved in 2010 to 1.25 billion (United Nations 2012a) 6 According to Povcal Net, in 2009 the Chinese population below the absolute poverty line of USD 1.25 was 11.80%. National distribution is based on aggregated Lorenz curve from original rural and urban distribution. Rural and urban distributions must be included when aggregating poverty measures from a group of countries (http://iresearch.worldbank.org/PovcalNet).
8 In 2010, labour force participation rate stood at 28% on average in the MENA countries and 44% in Southeast Asia compared to 65% in OECD countries (ILO 2012a).
9 Yet, if adolescent girls are kept in school to complete a quality secondary education, they will be much better equipped to reach their full potential and make informed choices about their lives. Just one additional year in school gives women better economic prospects, more decision-making autonomy, greater control over their own fertility, healthier children, and better chances of sending their own children to school 10 The OECD Programme for International Student Achievement (PISA) assessment measures the learning outcomes of 15-year-olds in mathematics, reading and science. The assessment evaluates the quality, equity and efficiency of school systems in over 60 countries that together make up nine tenths of the world economy.
11 The PISA index of economic, social and cultural status (ESCS) is a composite index derived from three indices: highest occupational status of parents, highest educational level of parents, and home possessions (including for example numbers of books in the home).
12 PIAAC measures proficiency in literacy, numeracy and problem solving in technology-rich environments among 16-65 year-old adults in 24 countries and sub-national regions.
13 For example, in 2010, 41% of the Algerian tertiary graduates studies social sciences, business and law, and 19% humanities and arts, while 14% of them studies science and 13.8% engineering, manufacturing and construction (UNESCO-UIS, 2013a).
14 World Health Organisation (2013), Global Health Observatory (GHO):
http://www.who.int/gho/mortality_burden_disease/life_tables/situation_trends_text/en/ 15 Self-rated health status reflects people’s overall perception of their health.
Survey respondents are asked a question such as: “How is your health in general? Is it very good, good, fair, poor, very poor?” 16 See WHO (2004), Morality and Burden of Disease from Water and Sanitation, GHO:
http://www.who.int/gho/phe/water_sanitation/burden/en/ 17 The environmental burden of disease quantifies the amount of disease caused by environmental risks.
Disease burden can be expressed in deaths, incidence or in Disability-Adjusted Life Years (DALY). The latter measure combines the burden due to death and disability in a single index. Using such an index permits the comparison of a burden due to various environmental risk factors with other risk factors or diseases. WHO recent profiles of EBD for 192 countries refer to a core set of environmental risks that includes: i) water, sanitation and hygiene; ii) indoor air; and iii) outdoor air.
18 In countries with strong welfare systems a poverty trap can develop where it does not pay people to access such work and lose the benefits and cash transfers which have become necessary to meet high living costs.
A number of cities, including Glasgow and Cape Town, have developed “living wage” campaigns, with the public sector taking a lead by offering living wages to all their staff despite the budget constraints associated with the global economic crisis.
19 Some 232 metro areas in 22 countries accounted for 56% of employment creation. Denmark, Greece, Japan and Portugal are excluded from this figure, as they experiences net job destruction over the period.
Hungary and Slovenia are excluded for a very different reason: employment creation in the metropolitan areas exceeded that for the country (in other words, employment in non-metropolitan places fell) (OECD 2013f).
20. In 1970, nearly 30% of the OECD labour force was employed in manufacturing. By the end of the century, this had fallen to under 20%. Over the same period, employment in services rose from less than half to two thirds of the labour force (OECD 2001).
21 Financial deepening is a rise in the volume of financial transactions relative to the real economy. Extensive research about the link between financial deepening and inequality has been conducted. Levine (2005) positively linked financial development to growth and equity in a sample of mainly developing countries;
in the same vein, a study on Thailand conducted by Hamori and Hashiguchi (2012) associates financial deepening with greater equity. Overall, financial deepening is associated with higher growth, but disproportionately benefits high-income groups. The accessibility of the financial sector is important in measuring growth from financial deepening (IMF 2008).
22. United Nations (2013), The Millennium Development Goals Report, United Nations, New York.
“Developing regions have made impressive strides in expanding access to primary education, with the adjusted net enrolment rate growing from 83 per cent in 2000 to 90 per cent in 2011.” Almost half the reduction in the global number of children out of school can be attributed to Southern Asia. Youth and adults both have made steady progress in literacy over the last two decades
23. On average, social expenditures represent almost 15% of GDP of lower middle income countries. Except some cases, such as Mongolia that provides universal children benefits, Asian country stand below this average, ranging from 4,4% in Laos to 12.5% in Indonesia.
24 Empirical work on the determinants of subjective well-being shows that the income-related variables, unemployment and health are highly significant (Boarini et al., 2012; OECD, 2013a).
25 For instance, one year in life expectancy was gained in 5 years in the United States versus 3 years in Ireland, two countries with identical life expectancy in 1995. More generally, the rate of progress varies between 8.2 years (Mexico) and 1.9 years (Estonia) per additional year of life expectancy, with an average of 3.9 years and a standard deviation of 1.1 year. When excluding ten emerging or transition countries, the average is identical but the standard deviation is still equal to 0.7 years. Sen (1998) notes that “[…] mortality rates can shift very quickly indeed when it moves in an upward direction due to an economic crisis. Famines provide a class of examples in which the movement of mortality can be disastrously rapid, and they certainly do call for immediate economic response. But there are also examples of other kind of economic and social change in which mortality rates have gone up extremely fast. The recent experience of the former Soviet Union and of Eastern Europe provides many such terribly distressing cases.” 26 Health has the largest impact (about 17% of disposable income), followed by inequality (15%) and unemployment (13%). Inequality is measured through the distribution of household disposable income across deciles. It is therefore not a comprehensive measure of inequality that would also capture the distribution of non-material components. This shortcoming reflects data constraints.
27 This is also a finding by Beal, Rueder-Sabater and Espirito-Santo (2012) who construct measures of wellbeing that cover 10 different dimensions and 150 countries. “...countries with higher GDP are not necessarily the best at converting their wealth into well-being for their citizens”.
28. See for instance OECD (2018) and OECD (2011a) 29 Reasons for the gap between per capita GDP and average household incomes include the increasing share of profits in national income, and their retention by corporations, or their eventual distribution in the form of capital gains.
30. In Foster and Szekely (2008), the income standard is defined as a “function that summarises the entire distribution in a single income level that indicates the general affluence of the distribution or the affluence of some part of the distribution”.
31 A previous study showed that the contribution of terms-of-trade fluctuations to the gap between real GDP per capita and average household disposable income was particularly large in commodity-exporting countries, and that it could also be significant elsewhere (Causa et al., 2014).
32 The trend rise in the profit share of GDP per capita would imply that associated income transfers from the corporate to the household sector increase for shareholders–generally households in the upper-end of the income distribution. In turn, an increase in the portion of profits that is distributed through capital gains (reinvested profits, share buy-backs, etc.) means that a growing share of household income is under-reported due to the treatment of capital gains.
These levels are obtained from selecting four values for the parameter τ in the equation of Box 2.5.
34. See OECD (2011a) and Koske et al (2012).
35. For evidence on employment effects see e.g. Nunziata, (2002), Bassanini and Duval (2006), de Serres and Murtin (2013) Nickel et al. (2005), and OECD, (2011a).
36. See Kluve (2010) for a survey on the effectiveness of ALMPs to improve labour market performance.
Vanhoult (1997) provides some evidence on inequality-reducing effects from higher spending on ALMPs.
37. See OECD (2011a) for references.
38. The measures taken are based on previous OECD work (OECD, 2011a) and accordingly the estimation is done by controlling for concomitant structural shifts affecting the composition of OECD economies, e.g. in terms of the sectoral (agriculture, industry and services) as well as the share of women in total employment.
39. In the latter case the paper measures overall trade as a share of GDP and does not disentangle imports and exports effects.
40 National Bureau Statistics China 41 See for example Moreno, L (2007) “Extending Financial Services to Latin America’s Poor,” McKinsey Quarterly 83, 90 42 This study was to some extent inspired by the seminal study from Australia: Creedy J. & Dixon, R (1998) “The Relative Burden of Monopoly on Households with Different Incomes,” 65 Economica.
43 See for instance, Bassanini and Duval, 2006; Griffith et al., 2007; Nicoletti and Scarpetta, 2005; Fiori et al., 2007; Nicoletti et al., 2001.
44 If there is lack of competition all along the supply chain, for example if there is a monopoly importer of a cereal, selling to oligopolistic manufacturers, who sell the final product to duopolistic supermarket chains, imposing competition on only one link in the chain might not make much difference, if any, in retail prices.
Attacking all links in the chain might be beyond the resources of the competition policy authorities (OECD 2013d) 45 See “The Future of Jobs—The Onrushing Wave,” briefing, The Economist, 18 January 2014 46 Labour Force Survey 47 OECD Institutional Investors Database http://www.oecd-ilibrary.org/finance-and-investment/data/oecdinstitutional-investors-statistics/oecd-institutional-investors-statistics_data-00498-en 48 www.investopedia.com/terms/m/mid_cap_fund.asp 49 In this context 'efficient' means: cheaper, safer, more frequent, with greater carrying capacity, etc.
50 In practice, commuters often react to faster intra-urban transport facilities by moving further from city centres to take advantage of lower land prices and more attractive surroundings 51 See in particular IEA (2010) special excerpt “Energy Poverty: How to make modern energy access universal” and IEA (2011) special excerpt: Financing access for the poor.
52 Can poor consumers pay for energy and water? An affordability analysis for transition countries, Samuel Fankhauser and Sladjana Tepic, EBRD 2005 53 “Fuel poverty in the USA: the overview and the outlook”, Dr. Meg Power, Reprinted from: ENERGY ACTION ISSUE NO. 98, MARCH 2006 54 Cold Comfort: The Social and Environmental Determinants of Excess Winter Death in England and Wales”, Paul Wilkinson, Ben Armstrong, Megan Landon et al, Published by The policy Press, UK, 2001 55 http://www.pge.com/myhome/customerservice/financialassistance/ 56 The OECD DAC Network on Poverty Reduction (POVNET) produced a number of recommendations on how donors could support Inclusive Growth in areas such as agriculture, infrastructure, private sector development, employment generation and social protection (OECD, 2007).
57 Birdsall, N. (2004), in C.W. Dugger, “To help poor be pupils, not wage earners, Brazil pays parents,” New York Times, 3 January 58 See, for example, Chattioadhyaym and Duflo (2004), Volden et al. (2013), Anzia and Berry (2011), and Volden and Wiseman (2011) 59 See, for example, Acemoglu, Johnson, and Robinson (2002), Bowles (2004), Piketty (2006), and Acemoglu and Robinson (2012) 60 These data refer to surveys that ask respondents whether they cast a ballot during the last election, and are compiled by the Comparative Study of Electoral Systems (CSES), an international research programme that collects comparable data on elections. The data include ratios of self-reported voter turnout between different subgroups of the population. These results have to be interpreted with some caution, as selfreported rates of turnout may be quite different from official voter turnouts. (OECD, 2011a) 61 See Faguet (2011).
62 See OECD (2007); also OECD (2013b), pp. 94-95.
63 Perception surveys are another method to collect evidence from citizens. Many OECD countries are using them for the purpose of complementing quantitative measurements (i.e.,. based on the Standard Cost Model) to identify burdensome regulations and assess irritation costs. In these cases, perception surveys deliver information about stakeholders’, businesses’ and citizens’ perceptions of the quality of regulations (OECD, 2010).
64 “Crowdsourcing represents the act of a company or institution taking a function once performed by employees and outsourcing it to an undefined (and generally large) network of people in the form of an open call. This can take the form of peer-production (when the job is performed collaboratively), but is also often undertaken by sole individuals. The crucial prerequisite is the use of the open call format and the large network of potential laborers.” (Howe, 2006)
65 See, in particular, Tompson (2009) and OECD (2010).
66 See Williamson and Haggard (1994); Rodrik (1996); and Arroyo (2008). Pierson (1996) argues that welfare-state retrenchment, in particular, can occur only via a policy of stealth. This view arguably finds support in the experiences of the many countries in which reforms have been successfully implemented with little prior consultation, often in the face of strong public opposition and at times in contravention of the declared policies of the governments undertaking them. See, for examples, Nelson (1990a, 1990b); and Boeri et al. (2006).
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