Rising inequality is one of the hottest topics up for debate, especially following the success of French economist Thomas Piketty’s book “Capital in the 21st Century.”
The OECD is out with a new report on rising income inequality. The key finding that stands out, is that the risk of poverty has shifted from the elderly, those over the age of 65, to young adults, those between the ages of 18 and 25.
Here are the key takeaways from the report:
- The 18-25 cohort saw the biggest loss of income once the crisis began, while those over the age of 65 were sheltered from the worst effects.
- Average household disposable income fell 1%, in inflation adjusted terms, among youth, and 0.7% among the 26-65 cohort. Meanwhile, those over the age of 65 saw a 0.9% increase per year on average.
- “By 2011, people aged 66 to 75 faced a risk of poverty that was 25% lower than the population average, and which was (for the first time since OECD data are collected) the lowest among all population groups.”
- The income of the poorest 10% of the population fell compared to the top 10%, according to a new OECD report. The largest increases were seen in Spain, Ireland, Greece, Estonia and Iceland, some of the countries that took the biggest blow from the crisis.
- The income of the bottom 10% fell by 1.6% per year from 2007 to 2011. Across the OECD, the average drop in income in the poorest 10% was double that of the top 10%.
- Relative income poverty, which refers to “the share of individuals with an equivalized disposable income below 50% of the national median)” was at more than 20% in Mexico and Israel in 2011. When looking at the period between the crisis and 2011 however, relative income poverty increased the most in Turkey and Hungary.
- On average, relative poverty impacts about 12% of the population in OECD nations.
- ” In 2011, singles and single parents were between two and three times more likely to be poor than the reference population.”
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