(15 May 2013) – Income inequality increased by more in the first three years of the crisis to the end of 2010 than it had in the previous twelve years, before factoring in the effect of taxes and transfers on income, according to new OECD data.
The analysis of the Organisation for Economic Co-operation and Development says that the welfare state has cushioned the blow for many but warns that further social spending cuts in OECD countries risk causing greater inequality and poverty in the years ahead.
After taxes and transfers, the richest 10 per cent of the population in OECD countries earned 9.5 times the income of the poorest 10 per cent in 2010, up from 9 times in 2007. The gap is largest in Chile, Mexico, Turkey, the United States and Israel, and lowest in Iceland, Slovenia, Norway and Denmark.
Child poverty has risen in 16 OECD countries since 2007, with increases exceeding 2 points in Turkey, Spain, Belgium, Slovenia and Hungary. This confirms a previously identified trend of young people and children replacing the elderly as the group most at risk of income poverty across the OECD.