Inequality of conditions, inequality of opportunity, and segregation: How to measure them? Inequality, segregation, diversity 2 •Inequality, segregation, diversity are tightly coupled concepts –diversity indicates mostly variety or quantity of groups in population –inequality and segregation indicate precise differences among groups • •Inequality refers to the uneven distribution of resources, opportunities, outcomes across groups –distribution of a variables in population –differences in one population from one criterion –vertical differences • •Segregation refers to the uneven distribution of groups across separate places, occupations or institutions –differences between two and more groups –differences between populations in specific areas (educational system, labor market) –horizontal differences Historically speaking, there are three major types of systems of social stratification: slavery, caste, and class. Let me briefly describe each type. 1. In slave systems, some peoples are considered less than human and are owned as property. Their legal rights are limited, certain relationships are prohibited, and as you might imagine, and social power is essentially nonexistent. 2. In caste systems, societal groupings are based on deeply held cultural ideals and boundaries. The Indian caste system exemplifies this societal form of stratification, having both cultural and economic impacts. Caste systems are rigidly based. They are characterized by hereditary status, endogamy, and social barriers and are sanctioned by custom, law, and religion. 3. Class systems are the stratification system we are familiar with. People are divided according to economic markers such as income, wealth, ownership, and so on. There are many different characterizations of what constitutes class, and we will be talking about these characterizations today. Two concepts of inequality 3 •Inequality of (economic) conditions –unequal distribution of income to people –vertical differences in wealth and material conditions –different incomes means different chances to get different goods –indicated by Lorenz curve or GINI (economic theme) –useful as explanatory variable for sociology – •Inequality of opportunity –unequal start positions –vertical differences in start positions means different chances to get different levels of education, jobs and incomes –indicated by levels of social mobility (sociological theme) –levels of societal openness – – Historically speaking, there are three major types of systems of social stratification: slavery, caste, and class. Let me briefly describe each type. 1. In slave systems, some peoples are considered less than human and are owned as property. Their legal rights are limited, certain relationships are prohibited, and as you might imagine, and social power is essentially nonexistent. 2. In caste systems, societal groupings are based on deeply held cultural ideals and boundaries. The Indian caste system exemplifies this societal form of stratification, having both cultural and economic impacts. Caste systems are rigidly based. They are characterized by hereditary status, endogamy, and social barriers and are sanctioned by custom, law, and religion. 3. Class systems are the stratification system we are familiar with. People are divided according to economic markers such as income, wealth, ownership, and so on. There are many different characterizations of what constitutes class, and we will be talking about these characterizations today. Inequality of conditions vs. inequality of opportunity •Inequality of conditions and inequality of opportunity are connected in empirical reality •Analytically they are two concepts that describe differences among people •Inequality of conditions result from social classes in empirical reality •Inequality of opportunity result from social movements/social mobility •GGC: Great Gatsby Curve –inequality generates – less opportunities –low social mobility • •Economic inequality is a huge social and political challenges of our time •President Obama calls inequality the defining issue of our time •World Economic Forum 2014 meeting at Davos pointed to inequality as the most pressing problem of the coming decade •In April 2014 Pope Francis tweeted: Inequality is the root of social evil •Statistics: –In Germany top 1% earns more than 150,000 EUR per year –In UK top 1% earns more than £150,000, top 5% earns more than £70,000 per year –In USA top 1% earns the annual income of $422,000 – •These data are not comparable from inequality point of view – – • Inequality of economic conditions Inequality of economic conditions •indicated by Lorenz curve in empirical reality –curve not number, it shows the shape of material inequality not the size – •the size of material inequality is indicated by GINI coefficient –it is number, it shows the size of material inequality • •CURVE vs. NUMBER – – – • 6 Lorenz curve I •Max O. Lorenz (1876-1959), American economist •description of concentration of incomes/wealth in societies •graphical presentation of inequality of conditions –it is cumulative distribution function • •Lorenz curve is utilized in social sciences as: •economy •sociology •demography •statistics u 7 Lorenz curve II •it is based on the comparison of cumulative distribution of incomes to cumulative distribution of population •higher distance between hypothetical and real Lorenz curve means higher inequality in incomes in society • u https://encrypted-tbn1.gstatic.com/images?q=tbn:ANd9GcRjhjQHzJUO7NIlMQBPUX9eofS5XFLltgz3Ia4JGHrzsAf -WyMgkA 8 Trends in Lorenz curve in the CR 9 Gini index I lCorrado Gini (1884-1965), Italian sociologist, statistician and demograph lthe Gini coefficient is also known as the Gini index or Gini ratio la measure of the income inequality lit is one number that represents the income distribution in society lthe coefficient varies between 0, which reflects complete equality and 1, which indicates complete inequality (one person has all the income or consumption, all others have none). l 10 Gini index II lGI is derived from Lorenz curve lit shows the relationship between the Lorenz curve area and the total area under ideal Lorenz curve area l 11 Trend in GINI in the Czech Republic 12 Trend in GINI in the Czech Republic 13 The Standardized World Income Inequality Database: The SWIID’s income inequality estimates are based on thousands of reported Gini indices from hundreds of published sources. market income households - LIS market income per capita - LIS gross income households - LIS disposable income households - LIS gross income households - OECD disposable income - EUROSTAT Differences in: 1) type of income; 2) unit of analysis; 3) type of database Inequality in selected countries, based on equalized household disposable income (after taxes and transfers). Source: https://ourworldindata.org/grapher/gini-disposable-household-income-lis Cross-country comparision of GINI Inequality in selected countries, 2010 Based on equalized household disposable income (after taxes and transfes). Advantages and disadvantages of Lorenz curve and GINI coefficient •advantages of GINI •it is a number suitable for comparison of many historical periods or countries •disadvantages of GINI •it does not show the shape of inequality, different shapes but one GINI coefficient •advantages of Lorenz curve •it shows the shape of inequality, it means that it makes differences among various types of inequalities •disadvantages of Lorenz curve •but Lorenz curve is not very suitable for huge comparisons, many curves means chaos 16 Some other measures of inequality •Share of income (top 10%, 1%, .1%, .01%) •20:20 Ratio (or decile ratio can be used) –Compares how much richer the top 20% of populations are to the bottom 20% (SE=4,UK=7,US=8) •the Robin Hood index, the Atkinson index and Theil's entropy measure. •Palma ratio (the ratio of the income share of the top 10% to that of the bottom 40%). How economic inequality harms societies •Video YT: Richard Wilkinson •https://youtu.be/cZ7LzE3u7Bw •Richard Gerald Wilkinson is British social epidemiologist •Best known for his book (with Kate Pickett) The Spirit Level, •He argues that equal distribution of incomes: –improves population health –decreases social problems (violence, drug abuse, teenage births, mental illness, obesity) –improves social cohesion • • • • Measures of inequality of opportunity •social mobility –SM is the movement of people up or down the stratification system • •retrospective vs. prospective measurement •structural social mobility vs. net social mobility •absolute vs. relative social mobility •percent/proportions vs. odds ratios • •opportunity structure for specific behaviour vs. effort, motivation, real behaviour • • 19 19 An important characteristic of class systems, as opposed to slave or caste systems, is that in class-based systems of stratification, there is the opportunity for social mobility. This means that people and groups can, potentially, move up or down in the rankings, and this is seen by many as a significant benefit of class systems. In reality, however, such mobility is less common than our national mythology suggests. Typically, those who arrive at high positions have families who either had high positions themselves or the resources to provide the appropriate education for advancement. Achieving upward mobility is very difficult, and the wonderful stories we’ve all heard and seen (think, for example, of the movie The Pursuit of Happyness) are so very moving because they are the exception, not the norm. If such stories were common, they would not get our attention in nearly the same way. Measures of segregation •Entropy, Theil Index, Information Theory Index, Dissimilarity Index, Divergence Index –Most measures are „entropy-based“ –Dissimilarity index is not „entropy-based“ •Entropy a Theil Index indicate the level of diversity between groups –if all are members of one group, there is no diversity in population •Entropy measure is offered for discrete variables (proportion) •Theil Index is offered for continuous variables (distribution) • • Dissimilarity index I •DI, D, or Δ, the most popular empirical measure of segregation •DI indicates the absolute difference between relative distributions two groups according to categories of next variable •example: what is gender segregation in tertiary education? 1)compute proportion of students by gender in selected study fields (social science, natural science, law, medicine, pedagogy) 2)subtract these proportions (negative results multiply by -1) 3)sum up all differences and divide the results by 2 • •DI is computed as sum of positive differences between two percent distributions divided by number 2: • • • • • Dissimilarity index II •advantages –intuitive and easy interpretation –identification of categories where the differences are high –multiply by 100 indicates what proportion is needed for equality between groups •disadvantages –numbers of categories influence the size of DI –more categories means higher probability in differences between groups –two DI can be compared only for groups with the same number of categories • • • • • • Entropy (E) •Theil (1967, 1971, 1972) introduced the concept of entropy to SS as a measure of population diversity –E is commonly used in physics to measure the randomness of a system •E is the amount of information needed to describe a probability distribution •High E, high uncertainty = two outcomes are equally likely –high probability of one outcome, less uncertainty about it and low E •E measures the probability of an outcome (m) occurring (e.g. race group), weighted by its probability occurrence (π) (proportion of race group in population) •overall E (interpreted as a measure of diversity) is: • • • • •if all are in the same group = no diversity in population, E=0 •If all are evenly distributed in two or more groups =, max diversity in population, E=1 • • • • Theil index (TI) •Theil (1971, 1972) derived several indexes using the logic of entropy •Theil index (TI) can be calculated for continuous distribution (income) –It measures the difference between the observed distribution and the mean • • • •if all incomes are equal = no inequality, TI=0 •if all are evenly distributed in two or more groups =, max diversity in population, TI=1 • • • • Segregation – why it happens? •Video YT: Segregation in US | Stanford Center on Poverty and Inequality •https://youtu.be/zxICQqDPD4g • • • • •