The OECD is continuing to expand its highly regarded work on inequality by launching a new research centre. The announcement will be formally made in Paris on Monday with a series of panel discussions, featuring economists, policy makers and government officials from a number of countries. I’m pleased to be a participant, but I’m looking for advice on how to answer to some questions that may be asked. I’d love to hear your ideas, so send them along.
The Centre’s website describes its mandate as “a new platform for promoting and conducting policy-oriented research on the trends, causes and consequences of inequalities in society and the economy, and a forum to discuss how policies can best address such inequalities.” This formalizes a research program that has led to three highly influential studies the OECD has published in recent years, the most recent called In It Together: Why Less Inequality Benefits All.
The launch on Monday October 26th begins with an opening session involving Angel Gurría, Secretary-General of the OECD, and Jason Furman, the Chairman of the Council of Economic Advisors in the Obama Administration. Here is the program for the day
Annette Young, the France 24 journalists, will be the moderator of the session called “Levelling the Playing Field: How to reduce inequality of opportunities?”
Here are some questions I anticipate she might put to the panel, which includes Heather McGhee of Demos; Francois Bourguignon, a Professor of Economics at the Paris School of Economics; Murray Leibbrandt, a Professor in the School of Economics at the University of Cape Town; and me.
Use the comment space that follows to offer your answers to any question appealing to you.
Session 1. Levelling the playing field: how to reduce inequality of opportunities?
High inequality can hinder social mobility because low-income parents do not invest enough in their children’s education or high-income parents can use their connections. The first panel will discuss how reducing the intergenerational transmission of advantage and disadvantage will help a society use skills and abilities more efficiently, promoting productivity and growth.
1) Inequality of opportunities and inequality of outcomes
- What is the right balance between long-term measures to increase opportunity and short-term measures of redistribution?
- We know, including from the OECD’s work, that in many countries parental background has a strong influence on children’s careers and earnings. What are the reasons?
- There seems to be general sentiment that moving up the ladder has become much more difficult than it used to be. Is that true? And do you observe this in all countries?
2) What do we know about the impact of policies to address the intergenerational transmission of advantage and disadvantage?
- Which key policy areas are most likely to affect social mobility, and where should we give priority? Examples include the fields of education and skill-building, a more inclusive labour market, asset-building and access to credit, progressive taxation, etc.
- The goal of equal opportunity approaches is to disentangle between efforts and circumstances. Can this reasonably be done? And how can we translate this into pragmatic and concrete policies?
- What is the role of “traditional” social protection in such a framework? Do we need to reform redistribution and how? Do tax-systems need to be more progressive?
- What is the role of the financial sector in contributing to widening inequality of income and wealth? What changes in the financial market would you suggest to improve equity?
3) What do we still need to know about the impact of policies on social mobility?
- What should be the priority in terms of policies: to help the poor climb up the ladder or limit income shocks for the middle classes?
- Which type of research is needed next? If it is focusing on multi-disciplinary approaches, what can policy makers expect to learn from these?
Economics for public policy 
There is considerable evidence that free-trade agreements, i.e. the main tool of globalization, lead to increased inequality. How could it be avoided?
Now that is a good question. Trade certainly contributed to lowering inequality between countries, but probably also to increasing it within the rich countries.
I am curious about how much inequality at a certain point is a force that only reinforces or exacerbates inequality because of perceptions and expectations that dampen aspirations – does it start in childhood and how much do children perceive inequality and how (is it more important in the neighbourhood, the media portrayal,…)? Apologies if this is already well understood.
H Miles: The OECD PIACC research program clearly defines the base source of so much inequality in Canada at the educational attainment and skills level.
I think that inability of so many Aboriginal Canadians (First Nation, Metis and Inuit) to function in the realms of literacy, numeracy and technical capacity is at the core of the inequality we measure using so many other socio-economic indicators.
Finnegan and Coates forthcoming Northern Review
PIACC and Northern Saskatchewan
The Programme for the International Assessment of Adult Competencies (PIACC) published on the comparative measures of three foundational skill sets of Canadians in comparison to other countries in the 2013.[1] Data has been released for Canada with breakouts of Aboriginal and non-Aboriginal populations. The findings for Aboriginal Saskatchewan are alarming. In Saskatchewan 32.6% of the ‘Aboriginal’ Population are operating at Level 1 or below. For non-aboriginal Canada the Level 1 population represented 16.2% (Figure 21). Here is the Level 1 definition from the OECD – PIACC:
Level 1: these individuals have skills that enable them to undertake tasks of limited complexity, such as locating single pieces of information in short texts in the absence of other distracting information. Those categorized as “below Level 1,” do not command these skills.
The situation is even more problematic on numeracy with Level 1 or below standing at 45.2% (Canada non-aboriginal 22.1%), which means that they have no more than the skills required to perform simple mathematical operations (counting or ordering).
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[1] Statistics Canada: Skills in Canada: First Results from the Programme for the International Assessment of Adult Competencies (PIAAC) Tourism and the Centre for Education Statistics Division Main Building, Room 2001, Ottawa, K1A 0T6, Catalogue no. 89-555-X ISBN 978-1-100-22678-1