Inequality

What is inequality?
It refers to the difference between levels of living standards, income,
wealth, and pay across the whole economic distribution.
UNDESA defines it as the state of not being equal, especially in status,
rights, and opportunities.
Two views on Inequality: (a) Inequality of Opportunity and (b)
Inequality of Outcomes.
Types of Inequalities: (a) economic, and (c) social.
Economic Inequality:
Inequality of Opportunity
it is characterized by the existence of unequal opportunities and
rewards for different social positions or statuses within a group or
society.
Exists when circumstances determine the differences in life
outcomes and when policies or structures do not compensate
individuals faced with disadvantageous circumstances.
Ex Ante. Contains structured and recurrent patterns of unequal
distribution of goods, wealth, opportunities, rewards, and
punishments.
Economic Inequality
Inequality of Outcomes
It occurs when individuals do not possess the same level of material
wealth or overall living economic conditions.
concerned with the finish line and depends on both
circumstances beyond one’s control as well as talent and
effort.
Ex post. Final inequality resulting from the economic, demographic
and social process which generates the distribution of income.
Social Inequality
Social inequality results from a society organized by hierarchies of
class, ethnic groups, race, and gender that unequally distributes
access to resources and rights.
Manifests in the following:
Income and wealth inequality
Unequal access to education and cultural resources
Unequal access to legal and policy mechanisms and services
Main ways by which Social Inequality is
Measured
Inequality of Condition
refers to the unequal distribution of income, wealth, and material goods.

Inequality of Opportunities
unequal distribution of life chances across individuals.
Economic Inequality
Types of Economic Inequality:
a.) Income inequality—extent to which income is distributed unevenly in a
group of people. Can be measured on an individual or household basis.
b.) Pay inequality—describes the difference between people’s pay and this
maybe within one company or across all pay received in a country.
c.) Wealth inequality—refers to the unequal distribution of assets in a group
of people.
Commonly Used Measures of Inequality
GINI Index or GINI Coefficient--a measure of the distribution of
income across a population developed by the Italian statistician
Corrado Gini in 1912.
It ranges from 0 (or 0%) to 1 (100%). 0 represents perfect equality,
while 1 represents perfect inequality.
Therefore, a higher GINI Index indicates that HIGH INCOME
INDIVIDUALS receive much larger percentages of the total
income of the population.
Measures of Inequality
Palma Ratio is
another measure of inequality. It is the ratio of the
richest 10% of the population’s share of gross national income
(GNI) divided by the poorest 40% of the population’s share.
The Palma Ratio is an alternative to the Gini index, and focuses on the
differences between those in the top and bottom income brackets.
Income inequality is largely the result of changes in the tails of the
distribution of the poorest and the richest as there tends to be
relative stability in the share of income that goes to the middle.
Social and Economic Impacts of Inequality
Stiglitz (2014), Wilkinson and Pickett (2010), and other scholars
(Rothstein and Ulsaner, 2005) argued that Inequality of Outcome has
many negative impacts on society. Among these are:
Reduced social cohesion
Increased crime, e.g. homicide rates.
Public health crises, e.g. teenage pregnancy
Weakened democratic institutions and development efforts.
Rothstein and Uslaner (2005) similarly argued that inequalities are
accompanied by a reduction in social cohesion, specifically in
interpersonal trust between different groups which is as a result of
economic equality and equality of opportunities.
High inequality is one of the main contributing factors to low growth and
weak economies (Stiglitz, 2014).
Public Health Impact of Inequality
In their work, The Spirit Level, Wilkinson and Pickett argued that
countries with high levels of income inequality, despite being among
the wealthiest in the world, the following cases are worse:
Mental illness
Drug and alcohol abuse
Obesity
Teenage pregnancy
High homicide rate
Short life expectancy
Children’s literacy and educational performance are worse
Inequality and Crime
Strong positive relationship between high levels of income inequality
and the occurrence or commission of criminality (Becker, 2013;
Messner & Rosenfeld, 1997).
Results in a 2018 Gallup Survey which surveyed respondents in
countries with high GINI Coefficient support the abovementioned
assertions across the following four measures: (a) Safety while
walking home alone; (b) Trust for the local police force; (c) Stolen
Property; and (d) assault.
Confidence in Local Police Safety While Walking Home Alone
Stolen Money or Property Assault
 Inequality and Trust
INTERPERSONAL
TRUST
Several scholars established the negative
correlation of inequality with trust. Whether it
be interpersonal or political trust.

Countries with the lowest levels of Inequality

have the highest level of interpersonal trust, and
vice versa.
Inequality and Trust
POLITICAL
TRUST
In terms of political
trust, countries
where citizens
indicated that
INCOME WAS
FAIRLY
DISTRIBUTED
also exhibited high
political trust for
their respective
governments.
(Lee, Chang, & Hur,
2020)
Inequality and Political Trust
Inequality and Political Trust
 Reduce
Inequalities
Within and
Among
Countries

Duke Thomas Gascon Dolorical

SDG 10: Overview
Too much of the world’s wealth is held by a very small group of
people.
This leads to social and financial discrimination and marginalization.
Nations would flourish if equality and prosperity would be made
available to everyone—regardless of gender, race, religious beliefs, or
economic status.
SDG 10: Overview
Inequality within and among countries is considered as a persistent
cause for concern, even with progress in some areas.
Income inequality continues to rise in many parts of the world,
despite income growth of the poorest 40% of most countries.
Greater focus is needed to reduce income and other inequalities.
The COVID-19 pandemic is worsening inequality.
It is hitting the most vulnerable the hardest and the wider effects of
the pandemic would likely have damaging impacts on poor countries.
If global recession ensues, there will be decreased flows of
development resources.
 SDG 10: Goals
Target 10.1: Reduce income inequalities
Target 10.2: Promote universal social, economic and political
inclusion
Target 10.3: Ensure equal opportunities and end discrimination
Target 10.4: Adopt fiscal and social policies that promotes
equality
Target 10.5: Improved regulation of global financial markets and
institutions
Target 10.6: Enhanced representation for developing countries
in financial institutions
 Inequality in the World
As of April 6 2021, there
are around 2,755
billionaires around the
world, according to
Forbes.com.
This is 660 more than
the number of
billionaires in 2020.
Together, they are
worth $13.1 trillion, up
from $8 trillion in 2020.
Whereas, the combined
GDP of Africa in 2019
is only $2.6 Trillion
(IMF).
 Concentration of Billionaires
United States—724
worth: $4.7 trillion

China—698
India—140
combined worth: $4.4
trillion
Inequality in the World
According to OXFAM, both halves of this graph, represent an
equal amount of global wealth.
Top half: 8 people $426 Billion
Bottom half: 3.6 billion poorest of humanity. ($120
each)
1 out of 9 go to bed hungry.
1 in 10 earn less than $2 a day.
736 million people live on $1.9 in 2015.

According to The World Bank, as of 2018, 3.4 Billion

people around the world still struggle to meet basic needs.
The World Bank forecasts indicate that 9 out of 10
extremely poor individuals will be living in Sub-Saharan
Africa by 2030.
 Top Billionaires of the world and Top
billionaires in the Philippines
Name Net Worth Country Philippine Billionaires
Jeff Bezos $201.4 B US Name Net Worth Name Net Worth
Bernard $181.6 B France Manny Villar $7.2 B Tony Tan $2.4 B
Arnault & Caktiong
Enrique Razon $5 B
Family Ramong Ang $2.2 B
Elon Musk $173.6 B US Lucio Tan $3.3 B
Inigo Zobel $1.4 B
Hans Sy $3 B
Bill Gates $129.9 B US Lance $1.2 B
Herbert Sy $3 B Gokongwei
Mark $117.8 B US
Zuckerberg Andrew Tan $3 B Roberto $1.2 B
Ongpin
Warren Buffett $103.7 B US Harley Sy $2.7 B
Ricardo Po $1.1 B
Larry Page $102.7 B US Henry Sy Jr. $2.7 B
Edgar Sia II $1.1 B
Larry Ellison $100.7 B US Teresita Sy- $2.7 B
Coson
Sergey Brin $99.6 B US Elizabeth Sy $2.4 B
Amancio $82.1 B Spain Source: https://www.forbes.com/real-time-billionaires/#4615fc163d78
Global GINI and Per Capita Income Growth
UN World Social Report 2020:
>Global Inequality has changed little between 1998 and 2008 (69.7 to 66.9)
>In 2013, Global GINI reached 62.5.
>Countries where inequality has grown are home to more than two thirds (71 per
cent) of the world population, e.g. China, USA, and India, among others.

>Per capita income growth has been very high among the 40th and 60th income
percentiles.
>The Global top 1 percent fared well. They captured 27% of all income growth from
1980 to 2016.
> Income share of the bottom 50 percent remained close to 9%.
>GLOBAL Inequality remains high because TOP INCOME EARNERS GAINED MORE
THAN THE REST
Inequality in the World.
However, growth in per capita income
has been slow among people at the
bottom 10 per cent of the income
distribution.
Number of people living in poverty
declined, but average income of the
poorest has not increased significantly.
Shift in the regional composition of the
bottom 10 percent:
1988—40% of all people in the bottom 10
percent lived in China
2008—practically all individuals in the
bottom 10 percent lived in sub-Saharan
Africa and India.
Regional Inequality: Latin America
Database)
(According to the World Inequality

Latin America is among the most unequal regions, with the top
10% capturing 54% of the national income.

Chile, Mexico and Brazil are the 3 most unequal countries in the
region, with the top 10% share capturing respectively 60%, 58%, 57%
of the average national income (2019).

Data shows a decline in inequality since 2000 in Ecuador,

Argentina and Uruguay, with the top 10% share capturing
respectively 38%, 40% and 42% of the national income (2019).
Regional Inequality: Africa
Africa comes next as one of the world’s most unequal regions,
with the top 10% capturing half of national income. 

Inequality levels in the African region are extremely high: the average
country-level top 10% income share equals half of the national income.

South Africa is the most unequal country of the region: in 2019, the
income share of top 10% households is estimated at 65%.

Inequality levels seem to have changed very little, on average, over the
last decades.
 Regional Inequality: Asia
In Asia, the top 10% captured 49% of national income in 2019, showing a
decrease in regional inequality since 1990, where the top 10% share amounted
to 57%.

While inequality has substantially risen in India and China, in the early 1990s and
2000s, it stabilized in China while it continued to rise in India.

This suggests that national economic policies do matter and lower inequality
levels can accelerate both poverty reduction and overall economic growth rates.

Within-country inequality has been rising significantly in major emerging

economies since 1990, while regional inequality in Asia has been decreasing.

This trend suggests a great economic convergence among Asian economies.

Regional Inequality: Europe
Europe is the least unequal region worldwide, with the top 10% capturing 35%
of the average national income in 2019

Western European countries continue to lead on redistributive outcomes due to

greater redistribution between the top 10% and the bottom 50%.

However, regressive tendencies have emerged in both East and West over the
last 10 years.

Income inequality within countries has grown significantly since 1980, but less so
since the Great Recession (2007-2009).
Regional Inequality: Middle East
The Middle East is the most unequal region worldwide, with the
top 10% capturing 56% of the average national income in 2019.
Gulf countries are the most unequal countries in the region: 54%
of national income accrues to the top 10%
Inequality levels have remained unchanged over the last three
decades. This is driven by the extreme levels of within-country
inequality.
Regional Inequality: North America and
Oceania
In terms of pre-tax top 10% income shares in 2019, Australia (35%) and
New Zealand (37%) remain significantly more equal than Canada (43%)
and the US (45%)
The US shows a significant rise in the concentration of incomes, unseen in
other rich nations: the top 10% captured 45% of the national income,
close to half of it (2019).
In all four countries, wages declined as a share of national income. This
decline does not reflect an increase in self-employment. Instead,
corporate profits have surged.
Without any change in the concentration of capital income, this increase
in corporate operating surplus already does much of the work to explain
the observed increases in inequality.
State of Inequality in the Philippines
ECONOMIC INEQUALITY
Philippine GINI Index

According to The World According to the Philippine Statistics

Bank, the Philippines has Authority, the Philippines has recorded the
recorded the following GINI following GINI Indices in recent years:
Indices in recent years: 2006—0.458
2000—47.7 2009—0.464
2003—46.6 2012—0.461
2006—47.2 2015—0.444
2009—46.3 2018—0.4267
2012—46.5
2015—44.6
2018—42.3
Philippine GINI: Per Region
Philippine Income Distribution and Inequality

As of 2019:

Average Income
Per Adult National Income: P590,956.73
Per Adult GDP: P654,383.56 

INCOME INEQUALITY Palma Ratio: 5.52

Top 10% Share: 47.5%
Top 1% Share: 16.9%
Middle 40% Share: 38.7%
Bottom 50% Share: 13.8%
UN SDG 10.1—Bottom 40% Income Share:
8.6%
Economic Inequality between Philippine
Regions
According to NEDA Usec. Adoracion Navarro, inequality in GRDP per
capita—average income of people in a region—widened from 2009
to 2018.
Richest is NCR among other regions with a GRDP per capita of
P253,893 in 2018—40% jump from the P181,748 in 2009.
The poorest is ARMM with its GRDP per capita barely improving from
P14,052 in 2009 to P14,657 in 2018.
Regional Per Capita GRDP from 2017-2019
Region Current Constant
Prices Prices
2017 2018 2019 2017 2018 2019
NCR 401,598 432,181 462,779 415,210 432,181 457,034
BARMM 47,471 52,013 55,151 49,239 52,013 54,020
CAR 159,756 173,651 179,752 165,997 173,651 179,484
1-Ilocos 102,915 113,471 120,512 108,156 113,471 120,153
2-Cagayan Valley 101,390 107,568 109,851 104,093 107,568 113,510
3-Central Luzon 159,443 173,452 179,840 165,346 173,452 179,954
4A-CALABARZON 160,625 175,563 181,781 167,558 175,563 179,661
MIMAROPA 105,511 119,813 120,240 111,920 119,813 122,879
V-Bikol 78,481 86,916 92,288 82,254 86,916 92,314
VI-Western Visayas 102,914 110,783 116,946 106,750 110,783 116,803
VII-Central Visayas 139,860 152,478 161,289 144,511 152,478 159,223
VIII-Eastern Visayas 87,192 96,204 99,492 91,113 96,204 99,999
IX-Zamboanga Peninsula 93,325 101,872 105,798 96,610 101,872 105,707
X-Northern Mindanao 152,911 167,832 177,998 158,825 167,832 175,373
Regional Per Capita GRDP from 2017-2019
Region Current Constant
2017 2018 2019 2017 2018 2019
XI-Davao Region 148,272 164,042 176,983 155,504 164,042 172,820
XII-SOCCKSARGEN 100,120 106,486 108,561 101,274 106,486 108,478
XIII-CARAGA 102,656 107,932 112,489 103,863 107,932 112,009
PHILIPPINES 158,940 172,712 181,907 164,885 172,712 180,528
Adjusted to the effects of
Inflation
SOCIAL INEQUALITY
Social Indicators of Inequality (Philippines)

Inequality-Adjusted HDI----------------------------0.587%
Coefficient of Human Inequality------------------17.8%
Income Inequality, GINI-----------------------------44.4
Income Inequality, quintile ratio------------------7.2
Income Share held by lowest 40%----------------15.0
Income Share held by the richest 1%------------n.a.
Income Share held by the richest 10%----------34.8
Inequality in Education-----------------------------10.1
Inequality in Income---------------------------------28.1
Inequality in Life Expectancy-----------------------15.3
Inequality-adjusted education index-------------0.610
Inequality-adjusted income index-----------------0.498
Inequality-adjusted life expectancy index-------0.668
Overall loss in HDI due to inequality-------------18.2
http://hdr.undp.org/en/countries/profiles/PHL
Gender Inequality
Philippines remains the top country in
Asia in narrowing the Gender gap,
according to the WEF Global Gender
Gap Report 2020.
The Philippines has closed 78% of its
overall gender gap but has fallen 8
places lower from its 2019 ranking.
The Philippines has also significantly
dropped its ranking on two key
indicators: (a) Educational Attainment,
and (b) Political Empowerment.
 Philippine Rating at the Inequality
Transparency Index
The Inequality Transparency Index is an
evolutive and collaborative tool describing
the availability and quality of information
on income and wealth inequality in a given
country.
The Philippines has a very low index score of 3.
 
The Index assesses a country’s Inequality Transparency
according to two standards:
1.) Income data and information (1-10)
2.) Wealth data and information (1-10)
It turns out, the only available data for inequality in
the Philippines is with regards income AND its
availability and quality is very poor. Meanwhile, in
terms of wealth data, the Philippines’ score was 0.
How is Inequality Being Addressed
To tackle Inequalities within countries, SDG-10 calls for actions to
reduce income-based inequality within countries.
SDG 10 (target 10.2) draws attention to attributed and circumstances
that affect the risk of exclusion and disadvantage, namely: age, sex,
disability, race, ethnicity, origin, religion, and economic status.
SDG 10 (target 10.3) also calls for “ensuring equal opportunity and
reducing inequalities in outcome” and points to the role of
discriminatory laws, policies and practices in preventing progress.
However, real and sustained efforts in addressing it continue to elude
most countries. (
SDGs incorporated in the PDP 2017-2022.
PDP 2017-2022 was cascaded to the government under EO No. 27, s.
2017.
PH Government setting up policies and enabling environments for
the implementation of SDGs.
The PH Government’s PDP and Ambisyon Natin 2040 are aligned
with the SDGs.
All SDGs can be mapped into
the priorities of the PDP.
Strategies of the PDP fall
under the three major pillars:
1.) enhancing the social fabric
2.) INEQUALITY-
REDUCING
TRANSFORMATION.
3.) Increasing Growth Potential
These strategies are cross-
cutting and synergistic with
each other.
Effects of Inequality
Benefits of Economic Inequality
Encourage incentives
Rewards risk and investment
Rewards hard work
Trickle-down effect
And then COVID-19 happened

“While the virus does not choose people, the

disease affects people very differently. What this
pandemic has highlighted is there is so much
inequity in society.” –Dr. Tony Dans, UP College of Medicine
Professor.
And then COVID-19 happened
Developing countries, including the Health System
Philippines, are affected the most (For every
10,000 people)
Developing
World
Developed
World
(UNDP). Hospital Beds 7 55
Weak health systems
Absence of sound social protection
policies Nurses 6 81
Vulnerable sectors
The pandemic is exposing the gap
between the haves and the have Doctors 2.5 30
nots.

UNDP: https://feature.undp.org/coronavirus-
vs-inequality/
COVID-19 widening the inequality gap
Lockdowns have
accentuated the digital
divide. 6.5 billion people
Billions do not have reliable around the globe –
internet and the necessary
gadgets to engage or 85.5 percent of the
participate in:
Online work, and work-from- global population.
home arrangements
Continue their education
Socialization
Online medical consultations
COVID-19 widening the inequality gap and Inequality
exacerbating the impacts of COVID-19
Socioeconomic impacts of COVID-19
NO WORK, NO PAY.
No comprehensive social protection
measures.
Choice between Gutom o Sakit?
Working age members of the family are
exposed to COVID-19.
Intersection of living arrangements and
inequality as factors in the exacerbation
of the pandemic.
Loss of livelihoods and income
Slashed income or earnings
Disruption of supply chains
(MSMEs)
Increase in personal and MSME
debts
Loss of primary income earners
in a family
Decrease in OFW remittances
 COVID-19 widening the inequality gap and
Inequality exacerbating the impacts of COVID-19
2015 Census of Population and Housing
Average household size: 4.4 members
Age structure:
95% of Filipino households have members in the
working age group.
Almost 25% of households have members who
are 60 years and above.
10% of households are composed of members
from 3 age groups: (a) young (below 15 years);
(b) working age (15-59); (c) old (60 years and
above).

Co-residential living arrangement.

Only 13% of 60 year old and over Filipinos live
alone.
Majority live with at least one adult child.
(Cruz, et. al, 2019).
Sources
https://www.worldbank.org/en/news/press-release/2018/10/17/nearly-half-the-world-lives-on-less-than-
550-a-day
https://www.thoughtco.com/sociology-of-social-inequality-3026287
https://www.un.org/en/development/desa/policy/wess/wess_dev_issues/dsp_policy_01.pdf
https://www.equalitytrust.org.uk/how-economic-inequality-defined
https://www.investopedia.com/terms/g/gini-index.asp
https://www.rappler.com/business/charts-regions-get-richer-poor-ones-barely-improve-philippines
https://www.forbes.com/sites/kerryadolan/2021/04/06/forbes-35th-annual-worlds-billionaires-list-fac
ts-and-figures-2021/?sh=7b09919c5e58