Leaving aside the great recession, most people will be aware that levels of income inequality have risen in many advanced economics, and inequality has tended to be at its highest in the English speaking, arguably neo-liberal countries. There has also been influential work taken to show that inequality can itself have negative consequences for societies. These provide strong motivations for this large-scale comparative study of trends in inequality, their causes, the consequences for societies, and the potential policy responses. This key context justifies this book. However, at close to 800 pages (and at almost 1.5Kg in weight) this impressive tome is likely to be destined for the reference section of relevant libraries. The research materials contained within are associated with an FP7 Project, Growing Inequalities’ Impacts or GINI. The clever acronym of the project does not imply an allegiance only to one particular measure of inequality, although it tends to be the most prominent measure in the comparative sections.
In the volume there are studies of 30 countries, specifically the EU (minus Cyprus and Malta) plus the USA, Japan, Canada, Australia and South Korea. In terms of book structure there are 27 chapters devoted to particular countries (the Baltic States are combined in one chapter, as are Slovakia and the Czech Republic).These country case studies are bookended by a brisk introductory chapter and a chapter setting out ‘Grand Narratives’ at the beginning, and a short set of conclusions at the end.
The analytical approach is based on specifying a common framework for the country-level analysis. This comes across as a fairly practical and flexible framework, rather than a more theoretically-oriented framework. The framework for the chapters has four main elements. They are [a] measures of inequality (for income and earnings, wealth, education); [b] looking at the effects of such inequalities (e.g., on deprivation or social cohesion, and health inequalities); [c] analysis of the effects of inequalities on politics and on culture (e.g., civic society, crime and attitudes to welfare); [d] analysis of policies that seek to address inequality, or which might alternatively have negative effects on inequality. These policies include intervention in wage setting such as minimum wages, and taxes and transfer policies.
The research investigators are naturally aware that this common framework cannot be applied to each country in the same way, not least because there is no consistent dataset that covers them all (albeit the Luxembourg Income Study comes closest). The authors of each country study are therefore able to use a range of data, and to focus on those aspects seemingly most relevant – and for which evidence is available – in their own countries. Hence there is somewhat different coverage in practice, though the core material is generally present throughout. Some research decisions, such as how to equivalise incomes, were also left to the different country investigators to take. Generally speaking the common structure makes it easy to extract useful information quickly from each country specific chapter. The quality of the contributors is clearly very high, and the names will be familiar to scholars of inequality.
Mostly this is a strong and accessible collection. There are some limitations, too. Clearly there is an extensive set of countries covered, which brings strengths but also weaknesses. There are some arguably interesting countries that are not included (perhaps Israel, Iceland, Norway would make for interesting studies given particular historic differences). Luxembourg gets as much space as the USA. Some European nations included as being rich countries, such as Romania and Bulgaria, are perhaps no richer than the better off countries of Latin America – though it is unsurprising that there is a European focus. Others might have preferred a more in-depth concentration on a smaller number of countries – there are always trade-offs in selecting the number and particular counties to include. Second, the data available to the researchers is mostly, though not exclusively, focused on a time window stretching from 1980 to 2010 – 30 years of data on 30 countries. This means good coverage of the period leading up to the recent global financial crisis, including experience of the great recession itself, but it is inevitably more limited in terms of how recovery from recession is affecting inequality. The chapter on Greece is perhaps particularly poignant given the policy paths followed since – that inequality had been declining during 1974–2009, but Greece was (in 2010) facing ’unprecedented declines in employment and wages’ (p 301) – even the updating with 2012 information only goes so far. The timing also presumably explains a few odd literature biases. Piketty's work only appears in one chapter (the one he co-wrote on France, and not Capital in the Twenty-First Century).
Overall this is a work that extensively documents trends in inequalities, and not just of incomes, during 1980–2010. There are strong scholarly contributions, and this represents an important reference for comparative study of inequality. Those seeking an overall picture of trends in inequality may find the second chapter particularly helpful, and then of interest the particular case studies of countries. Those seeking further details about the overall project which has now ended, and including some data resources, may find them online at http://www.gini-research.org/articles/home.
