How we measure inequality? Inequality of what? What inequality(ies)? * Income inequalities: Gini, Palma, S20/S80, Bottom 40% * Human inequalities --> Inequality-adjusted human development index (IHDI), Human Opportunities Index (HOI), Bottom 40% Overlapping inequalities --> Social exclusion index (SEI) Gender Inequalities --> Gender Development Index (GDI)

1. Measuring Inequalities
Dialogue on Inequalities, 21-22 January 2015
Istanbul, Turkey
Mihail Peleah, UNDP IRH Programme Specialist, Green
Economy and Employment
mihail.peleah@undp.org

2. Frost Report”Social Class”
https://www.youtube.com/watch?v=SfiFTEaz_0U

3. Measuring Inequalities
• Inequality of what? What inequality(ies)?
• Income inequalities: Gini, Palma, S20/S80,
Bottom 40%
• Human inequalities
 Inequality-adjusted human development index (IHDI)
 Human Opportunities Index (HOI), Bottom 40%
• Overlapping inequalities  Social exclusion index
(SEI)
• Gender Inequalities  Gender Development
Index (GDI)

4. Gini

5. Palma~50%

6. Bottom 40%

7. 0%
5%
10%
15%
20%
25%
30%

8. 0%
2%
4%
6%
8%
10%
12%
14%
16%
18%

9. 0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%

10. Gini vs Palma
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
0% 20% 40% 60% 80% 100%
Country A
Country B
Country C
Perfect equality
A B C
Gini 0.360 0.360 0.360
Palma 1.647 1.917 4.000
Bottom
40%
17% 24% 4%

11. Inequality-adjusted human
development index
What it captures?
• Human Development Index discounted for inequality in each dimension:
Health, Education, and Living Standards
– HDI: index of average achievements in human development dimensions
– IHDI: (real) level of human development when the distribution of
achievements across people in a society is accounted for
Why this is important?
• Social inequalities closer correlate with development, than income
inequality
• Could be adjusted to country requirements (in fact based on Mexico work)
What it doesn’t capture?
• Intersecting and overlapping inequalities: e.g. sick and low-educated, and
low income

13. Human Opportunities Index (HOI)
What it captures?
• Coverage by basic services for children discounted by inequality in access
for different circumstances
– Basic services: education, water, electricity, sanitation, no overcrowding, …
– Circumstances: gender, relatives, household head education, wealth, area of
residence , …
• Simplified: access to basic service for bottom 40% and top 20%
Why this is important?
• Leveling playing field— your future do not depend on where you come
from, how much your family earns, or whether you are male or female.
What it doesn’t capture?
• Outcomes—access to basic services doesn’t automatically translate to
equal outcomes

14. Human Opportunity Index: Education
and Access to water

15. Social Exclusion Index (SEI)
What it captures?
• Objective and multidimensional measure of social exclusion
• Exclusion as overlapping inequalities—threshold is 9 out of 24 possible
deprivations
• Three areas of exclusion, 24 indicators
– Economic exclusion
– Exclusion from social services
– Exclusion from civic and political participation
Why this is important?
• Accumulation of inequalities could lead to social exclusion
• Social exclusion status vs Social Exclusion Drivers, Personal Characteristics, Local
Conditions  Policy actions
• Could be adjusted to country requirements
Limitations and drawbacks?
• Data voracious, requires separate survey or module in regular survey

16. Drivers of social exclusion
Specific local conditions
Social exclusion status
Individual characteristics
interact
with
in context of
…and result in
Structures and institutions; values and
behavior patterns; policies
Drivers are external factors, influenced by
legacies, that either speed up or slow
down the process of individual
vulnerabilities turning into social exclusion
(social exclusion risk factors),
like poor education, disability,
minority status
Predominant industry, single or multiple
employment opportunities, local
infrastructures, history of violent conflict
or environmental disaster
of the individual in three dimensions—
exclusion from economic life, social
services, and civic and social
participation
Social Exclusion Chain

17. Different combinations of individual risks, drivers and
local context produce different levels of social exclusion
If you are young person, with low education, living in village, with single company—you face
high risk of exclusion
…and secondary education doesn’t help much in these conditions…
…while vibrant business environment makes a lot of difference
…economic centers offer more opportunities (even with low education)
…and much more if you are educated
+
+
+
+ + +Source: RHDR “Beyond Transition: Toward Inclusive Societies”, 2011

18. Gender Development Index (GDI)
What it captures?
• Gender gap in human development achievements in three basic
dimensions
– HDI: index of average achievements in human development
dimensions
– GDI: (real) level of human development when the distribution of
achievements between genders is accounted for
Why this is important?
• Gender gap means denied participation in development
What it doesn’t capture?
• Intersecting and overlapping inequalities
• Average gains in one area and loses in another don’t tell full story

19. Central Asia: declining participation of
women