This is a presentation by Dr Abigail McKnight at the RUSI Resilience Conference 2014.

1. Inequality
Abigail McKnight
RUSI Conference 14 November 2014

2. Outline
• Inequality trends
• Redistributive effect of welfare state
•• MMoobbiilliittyy
• Impact of inequality
• Vulnerabilities associated with inequality
• Policy challenges
RUSI Conference 14 November 2014

3. Income inequality – international trends
0.4
0.35
0.3
0.25
Australia
Canada
RUSI Conference 14 November 2014
0.2
0.15
0.1
0.05
0
Ireland
United
Kingdom
United States

4. Redistributive effect of taxes and cash transfers
(Gini coefficient)
60
55
50
original income
gross income
45
40
35
30
25
disposable income
post-tax income
1980 1982 1984 1986 1988 1990 1992 1994/95 1996/97 1998/99 2000/01 2002/03 2004/05 2006/07 2008/09
RUSI Conference 14 November 2014

5. Types of inequality
• Earnings
• Income
• Wealth
• Spread vs concentration
RUSI Conference 14 November 2014

6. Is inequality too high?
60
70
80
90
100
Those agreeing that the "gap between those with high
& low incomes is too large" (%)
0
10
20
30
40
50
1986
1987
1989
1990
1991
1993
1994
1995
1997
1998
1999
2000
2001
2002
2003
2004
2006
2007
2008
2009
Year
Degree
Higher Ed, A-level or equiv
O-level, CSE or equiv
No qualification
RUSI Conference 14 November 2014

7. Mobility
• Earnings mobility fell over the period that
earnings inequality increased
• Intergenerational mobility
– Economists conclude that it fell for cohorts born
between 1958 and 1970 and seem ttoo hhaavvee ssttaabbiilliisseedd
at lower level
– Sociologists conclude that class mobility has been
stable - with a recent more nuanced assessment
• International evidence suggests that higher rates
of inequality are associated with lower rates of
mobility
RUSI Conference 14 November 2014

8. Does inequality matter?
• Bivariate correlations suggest a negative
relationship between inequality and a range of
social outcomes (family breakdown, crime,
hheeaalltthh))
• Longitudinal evidence less conclusive
• But evidence that economic inequality drives
inequalities in other domains (social
gradients)
RUSI Conference 14 November 2014

9. Voter turnout
90
80
70
60
% of registered voters who actually voted
50
40
30
20
10
0
1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010
Year
Parliamentary Elections
EU Parliament Elections
RUSI Conference 14 November 2014

10. Voter turnout – social class
100
95
90
85
80
Respondents who voted in the general election (%)
75
70
65
60
55
50
I. Professional
II. Intermediate / Managerial & Technical
III. (non-manual) Skilled
III. (manual) Skilled
IV. Partly Skilled
V. Unskilled
Feb 1974 Oct 1974 May 1979 1983 1987 1992 1997 2001 2005
Year
RUSI Conference 14 November 2014

11. Inequality and political instability
• Vulnerabilities
– Disenfranchised, disillusioned and distrusting
‘voters’ withdraw from the voting booth
– Elections results are iinnccrreeaassiinnggllyy bbeeiinngg
determined by a select social stratum
– Mixed with an increasingly wealthy and powerful
elite they go on to shape policies in their favour
– Main parties vying for the centre ground (median
voter) leaves plenty of room for new populist
parties
RUSI Conference 14 November 2014