Chairman Ben S.

Bernanke
Before the Greater Omaha Chamber of Commerce, Omaha, Nebraska
February 6, 2007
The Level and Distribution of Economic Well-Being
A bedrock American principle is the idea that all individuals should have the opportunity to succeed on the basis of their
own effort, skill, and ingenuity. Equality of economic opportunity appeals to our sense of fairness, certainly, but it also
strengthens our economy. If each person is free to develop and apply his or her talents to the greatest extent possible,
then both the individual and the economy benefit.
Although we Americans strive to provide equality of economic opportunity, we do not guarantee equality of economic
outcomes, nor should we. Indeed, without the possibility of unequal outcomes tied to differences in effort and skill, the
economic incentive for productive behavior would be eliminated, and our market-based economy--which encourages
productive activity primarily through the promise of financial reward--would function far less effectively.
That said, we also believe that no one should be allowed to slip too far down the economic ladder, especially for
reasons beyond his or her control. Like equality of opportunity, this general principle is grounded in economic
practicality as well as our sense of fairness. To a significant extent, American economic success has resulted from the
flexibility and adaptability of our dynamic market economy. Indeed, the ability of our labor and capital markets to
accommodate and adapt to economic change has helped make possible the strong productivity performance of the U.S.
economy over the post-World War II era, including the past decade. But this very dynamism sometimes creates painful
dislocations, as when a shift in consumer demand, the advent of new technology, or new competition leads to the
closing of a factory or causes a worker's skills to become obsolete. If we did not place some limits on the downside risks
to individuals affected by economic change, the public at large might become less willing to accept the dynamism that is
so essential to economic progress.
Thus, these three principles seem to be broadly accepted in our society: that economicopportunity should be as widely
distributed and as equal as possible; that economicoutcomes need not be equal but should be linked to the
contributions each person makes to the economy; and that people should receive some insurance against the most
adverse economic outcomes, especially those arising from events largely outside the person's control. Even when we
accept these principles, however, important questions remain. For example, what is meant in practice by equality of
economic opportunity? Some might limit the concept to the absence of overt discrimination against particular individuals
or groups, while others might extend the term to encompass universal access to adequate housing, education, and
health care. Another difficult question is how to balance the need for maintaining strong market-based incentives, which
support economic growth and efficiency but may be associated with greater inequality of results, against the goal of
insuring individuals against the most adverse outcomes, which may reduce inequality but also tends to diminish the
strength of incentives. No objective means of answering these questions exists. One can only try to understand the
various issues and tradeoffs involved and then come to a normative judgment based on that understanding.
I raise these questions of ethics and values because they are inextricably linked with the topic of my talk today, which is
the level and distribution of economic well-being in the United States. As I will discuss, the average standard of living in
this country has improved considerably over time. However, by many measures, inequality in economic outcomes has
increased over time as well, albeit at varying rates. In the remainder of my remarks I will review these trends. I will
discuss what economic research has to say about the sources of rising inequality and briefly consider some implications
for economic policy. I will not draw any firm conclusions about the extent to which policy should attempt to offset
inequality in economic outcomes; that determination inherently depends on values and social tradeoffs and is thus
properly left to the political process.
Trends in the Level and Distribution of Economic Well-Being
On average, and by almost any measure, Americans have gained ground economically over time. For example, since
1947, the real (that is, inflation adjusted) hourly compensation of workers in the U.S. nonfarm business sector (a
measure that includes both earnings and benefits) has increased more than 200 percent. In other words, the real
reward for an hour of work has more than tripled over the past sixty years.
1
Over the same period, real disposable
income per capita has increased almost 270 percent, real consumption per capita has increased almost 280 percent,
and real wealth per capita has risen 310 percent. We have also seen significant gains in other indicators of living
standards, such as health and educational attainment. Thus, in absolute terms, the well-being of most Americans
compares quite favorably with that of earlier generations and, indeed, with the well-being of most people in the world
today.
Although average economic well-being has increased considerably over time, the degree of inequality in economic
outcomes has increased as well. Importantly, rising inequality is not a recent development but has been evident for at
least three decades, if not longer.
2
The data on the real weekly earnings of full-time wage and salary workers illustrate
this pattern. In real terms, the earnings at the 50
th
percentile of the distribution (which I will refer to as the median wage)
rose about 11-1/2 percent between 1979 and 2006. Over the same period, the wage at the 10
th
percentile, near the
bottom of the wage distribution, rose just 4 percent, while the wage at the 90
th
percentile, close to the top of the
distribution, rose 34 percent.
3
In 1979, a full-time worker at the 90
th
percentile of the wage distribution earned about 3.7
times as much as a full-time worker at the 10
th
percentile. Reflecting the relatively faster growth of wages of higher-paid
workers, that ratio is 4.7 today. The gap between the 90
th
and 10
th
percentiles of the wage distribution rose particularly
rapidly through most of the 1980s; since then, it has continued to trend up, albeit at a slower pace and with occasional
reversals.
The long-term trend toward greater inequality seen in real wages is also evident in broader measures of financial well-
being, such as real household income.
4
For example, the share of income received by households in the top fifth of the
income distribution, after taxes have been paid and government transfers have been received, rose from 42 percent in
1979 to 50 percent in 2004, while the share of income received by those in the bottom fifth of the distribution declined
from 7 percent to 5 percent. The share of after-tax income garnered by the households in the top 1 percent of the
income distribution increased from 8 percent in 1979 to 14 percent in 2004 (Congressional Budget Office, 2006).
5
Even
within the top 1 percent, the distribution of income has widened during recent decades.
6

The measures of inequality I have cited reflect "snapshots" of a single time period, usually a year. Consequently, they
may not tell a complete story about the extent of inequality or its trend. For example, the fact that an older, more-
experienced worker earns more than a newly hired employee will appear as wage inequality when measured at a given
time; but as long as the new employee can expect to gain experience and someday earn a higher wage, inequality
arising for this reason should not particularly concern us. Studies that track individuals' positions in the earnings
distribution over time suggest that, in a given five-year period, almost half the population moves from one quintile of the
distribution to another, and the percentage moving between quintiles increases over longer periods (McMurrer and
Sawhill, 1996). However, economists disagree about whether income mobility has changed significantly over time (Lee
and Solon, 2006). If it has not, then factors related to mobility cannot go far in helping to explain the upward trend in
measures of short-term inequality.
7

The Sources of Changes in the Level and Dispersion of Economic Well-Being
What are the underlying sources of these long-term trends in wages, incomes, and other measures of economic well-
being? Economists have established that, over longer periods, increases in average living standards are closely linked
to the growth rate of productivity--the quantity of goods and services that can be produced per worker or per hour of
work. Since 1947, hourly labor productivity in the U.S. nonfarm business sector has increased a robust 2-1/4 percent
per year, and productivity growth has been close to or above that figure in most of the past ten years. This sustained
productivity growth has resulted in large and broad-based improvements in the standard of living. When discussing
inequality, we should not lose sight of the fact that the great majority of Americans today enjoy a level of material
abundance--including the benefits of many technological advances, from air conditioning to computers to advanced
medical treatments--that earlier generations would envy.
That being said, understanding the sources of the long-term tendency toward greater inequality remains a major
challenge for economists and policymakers. A key observation is that, over the past few decades, the real wages of
workers with more years of formal education have increased more quickly than those of workers with fewer years of
formal education. For example, in 1979, median weekly earnings for workers with a bachelor's (or higher) degree were
38 percent more than those of high-school graduates with no college experience; last year, that differential was 75
percent. Similarly, over the same period, the gap in median earnings between those completing high school and those
with less than a high-school education increased from 19 percent to 42 percent. To a significant extent, to explain
increasing inequality we must explain why the economic return to education and to the development of skills more
generally has continued to rise.
Economists have hypothesized that technological advances, such as improvements in information and communications
technologies, have raised the productivity of high-skilled workers much more than that of low-skilled workers. High-
skilled workers may have enjoyed this advantage because, for example, they may have been better able to make more
effective use of computer applications, to operate sophisticated machinery, or to adapt to changes in workplace
organization driven by new technologies. If new technologies tend to increase the productivity of highly skilled workers
relatively more than that of less-skilled workers--a phenomenon that economists have dubbed "skill-biased technical
change"--then market forces will tend to cause the real wages of skilled workers to increase relatively faster.
Considerable evidence supports the view that worker skills and advanced technology are complementary. For example,
economists have found that industries and firms that spend more on research and development or invest more in
information technologies hire relatively more high-skilled workers and spend a relatively larger share of their payrolls on
them (Autor, Katz, and Krueger, 1998; Bartel and Sicherman, 1999; Berndt and Morrison, 1995; Berman, Bound, and
Griliches, 1994).
Although skill-biased technical change appears to be an important cause of the rise in earnings inequality, it does not
provide a complete explanation for that trend. The hypothesis cannot explain, for example, why the sharp rise in
investment in information technology in the 1990s was not accompanied by a higher rate of increase in wage inequality.
Nor can it explain why the wages of workers in the middle of the distribution have grown more slowly in recent years
than those of workers at the lower end of the distribution, even though, of the two groups, workers in the middle of the
distribution are typically the better educated (Autor, Katz, and Kearney, 2006; Autor, Levy, and Murnane, 2003).
Another challenge for the hypothesis of skill-biased technical change, at least in its basic formulation, is to explain the
especially large wage gains seen at the top of the distribution. A possible link between technological change and the
substantial increases in the wages of the best-paid workers is that some advances, such as those that have swept the
communications industry, may have contributed to the rise of so-called "superstars"--a small number of the most-gifted
individuals in each field who are now better able to apply their talents in what has increasingly become a global
marketplace (Frank and Cook, 1995; Hausman and Leonard, 1997; Krueger, 2005; Manasse and Turrini, 2001; and
Rosen, 1981). For example, two decades ago, the highest-paid player for the Boston Red Sox baseball team (and in the
American League), Jim Rice, earned (in inflation-adjusted terms) just over $3 million. In 2004, the highest-paid player on
the Red Sox (and in all of major-league baseball) was Manny Ramirez, who received $22.5 million for the season. The
number of fans who can fit into Fenway Park has not increased much since Jim Rice's day. But presumably the Red
Sox owners believed that Ramirez's higher salary was justified by the increases in broadcast and merchandising
revenues he might generate as a result of the confluence of new distribution channels (such as Internet-based
broadcasts of games) and a larger and wealthier potential global audience.
8
The earnings potentials of superstar
entertainers, investment bankers, lawyers, and various other professionals have likewise risen sharply as technological
innovations and globalization have helped them leverage their talents over a wider sphere.
The compensation of chief executive officers of corporations is often singled out for particular scrutiny. Some
economists have argued that the observed increases in CEO pay packages can largely be justified by economic factors,
such as changes in the relationship between the CEO and the firm that have led to shorter and less-secure tenures for
CEOs (Kaplan and Minton, 2006) and to a greater tendency to hire CEOs from outside the company (Murphy and
Zabojnik, 2004). Others note that substantial increases in the size and scope of the largest corporations have raised the
economic value of skilled corporate leadership (Gabaix and Landier, 2006). However, critics have responded that
increases in CEO pay may have been amplified by poor corporate governance, including the substantial influence that
some CEOs appear to have had over their own pay (Bebchuk and Fried, 2003). This debate will no doubt continue.
Beyond the effects of technological change, the variety of economic forces grouped under the heading of "globalization"
may also have been a factor in the rise in inequality, even as these forces have provided a major stimulus to economic
growth and to living standards overall. Immigration--the flow of people across borders--is one aspect of the increased
economic integration of the world economy. In recent decades, most immigrants to the United States have arrived with
relatively low levels of skills. By itself, this pattern of immigration increases measured inequality because it leads to an
increase in the relative size of the low-wage work force (Lerman, 1999). Standard economic reasoning also suggests
that the immigration of such workers should reduce the relative wages of less-skilled domestic workers. Empirical
analyses of individual cities or regions have found some evidence that corroborates this hypothesis, although in most
cases the effect appears to have been small. A typical finding is that an increase of 10 percent in the share of
immigrants in a city reduces the wages of lower-skilled natives 1 percent or less. This somewhat muted effect of low-
skilled immigration on local markets may reflect the adaptability of U.S. labor and product markets, which has allowed
native workers and firms to adjust with relatively little displacement (Card, 2005; Card and Lewis, 2005; and Lewis, 2004,
2005). However, studies that examine national data tend to find somewhat larger effects, with a 10 percent increase in
the share of immigrants in the total population reducing the wages of low-skilled natives 3 percent to 5 percent (Borjas,
2006).
International trade, another aspect of globalization, may also have differential effects on the economic well-being of U.S.
workers even as it tends to raise real wages and incomes on average. For example, some empirical research suggests
that, in the 1980s and 1990s, increased international trade reduced the profitability and hence the demand for labor in a
number of industries that employed relatively more low-skilled workers (Borjas, Freeman, and Katz, 1997; Sachs and
Shatz, 1994). Of course, trade has increased the potential markets for other domestic industries, leading to higher
demand and thus higher real wages for workers in those industries. A related development has been the outsourcing
abroad of some types of services and production activities. Because labor markets are adaptable, outsourcing abroad
does not ultimately affect aggregate employment, but it may affect the distribution of wages, depending on the skill
content of the outsourced work. At least until recently, most such activity appears to have involved goods and services
that use relatively more low-skilled labor, which (all else being equal) would tend through the workings of supply and
demand to slow the growth of wages of domestic low-skilled workers relative to those with greater skills (Feenstra and
Hanson, 1996).
9

Unfortunately, much of the available empirical research on the influence of trade on earnings inequality dates from the
1980s and 1990s and thus does not address later developments. Whether studies of the more-recent period will reveal
effects of trade on the distribution of earnings that differ from those observed earlier is to some degree an open question.
Overall, I read the available evidence as favoring the view that the influence of globalization on inequality has been
moderate and almost surely less important than the effects of skill-biased technological change.
Finally, changes in the institutions that have shaped the labor market over the past few decades may also have been
associated with some increase in wage inequality. For example, unions tend to compress the dispersion of pay for jobs
in the middle of the skill distribution. Thus, the decline in private-sector union membership over the post-World War II
period--particularly the sharp drop in the 1980s--has been associated with an increased dispersion of pay among
workers with intermediate levels of skill (Freeman, 2005). The sources of the decline in union membership are much
debated, and certainly long-run structural changes in the economy, such as the decline in manufacturing employment,
have played a role. Whatever the precise mechanism through which lower rates of unionization affected the wage
structure, the available research suggests that it can explain between 10 percent and 20 percent of the rise in wage
inequality among men during the 1970s and 1980s (Card, 2001; DiNardo, Fortin, and Lemieux, 1996; Freeman, 1993).
Declines in the real value of the minimum wage, brought about by the combination of inflation and the fact that minimum
wages are usually set in dollar terms, also affect the labor market. Some research suggests that this factor contributed
to the relative decline in the wages of the least-skilled workers during the 1980s. Economists have also pointed out that,
although higher minimum wages increase the wages of those who remain employed, they may also lead to reduced
employment of low-skilled workers. Thus, the net influence of the minimum wage on earnings and income inequality, as
opposed to the inequality of observed hourly wages, is ambiguous (Neumark, Schweitzer, and Wascher, 2005). In any
case, the real value of the minimum wage, adjusted to include state minimum wages that are above the federal level,
has been fairly flat in recent years, and so has the proportion of the labor force that is unionized. This suggests that
these institutional factors have been less important sources of increasing wage inequality recently than they were in the
1970s and 1980s.
Some Policy Implications
What, if anything, should policymakers do about the trend of increasing economic inequality? As I noted at the
beginning of my remarks, answering this question inevitably involves some difficult value judgments that are beyond the
realm of objective economic analysis--judgments, for example, about the right tradeoff between allowing strong market-
based incentives and providing social insurance against economic risks. Such tradeoffs are, of course, at the heart of
decisions about tax and transfer policies that affect the distribution of income as well as countless other policy debates.
Policy approaches that would not be helpful, in my view, are those that would inhibit the dynamism and flexibility of our
labor and capital markets or erect barriers to international trade and investment. To be sure, the advent of new
technologies and increased international trade can lead to painful dislocations as some workers lose their jobs or see
the demand for their particular skills decline.
10
But hindering the adoption of new technologies or inhibiting trade flows
would do far more harm than good, as technology and trade are critical sources of overall economic growth and of
increases in the standard of living.
A better approach for policy is to allow growth-enhancing forces to work but to try to cushion the effects of any resulting
dislocations. For example, policies to facilitate retraining and job search by displaced workers, if well designed, could
assist the adjustment process. Policies that reduce the costs to workers of changing jobs--for example, by improving the
portability of health and pension benefits between employers--would also help to maintain economic flexibility and
reduce the costs that individuals and families bear as a result of economic change. Of course, devising policies that
accomplish these goals in the most effective way is not straightforward, nor can such policies deal with all of the
negative effects of trade and technology on affected individuals. Displaced older workers present a particularly difficult
problem, as these workers have greater difficulty than others in finding new jobs and experience a greater decline in
earnings than other workers if they are re-employed (Munnell and others, 2006). Considerable debate and analysis of
policy alternatives lie ahead, but these discussions will be well worth the effort.
As the larger return to education and skill is likely the single greatest source of the long-term increase in inequality,
policies that boost our national investment in education and training can help reduce inequality while expanding
economic opportunity. A substantial body of research demonstrates that investments in education and training pay high
rates of return both to individuals and to the society at large (Acemoglu and Angrist, 2001; Becker, 1964; Card, 1999;
Topel, 2004). That research also suggests that workers with more education are better positioned to adapt to changing
demands in the workplace.
In assessing the potential of education and training to moderate inequality, one should keep in mind that the
economically relevant concept of education is much broader than the traditional course of schooling from kindergarten
through high school and into college. Indeed, substantial economic benefits may result from any form of training that
helps individuals acquire economically and socially useful skills, including not only K-12 education, college, and
graduate work but also on-the-job training, coursework at community colleges and vocational schools, extension
courses, online education, and training in financial literacy. The market incentives for individuals to invest in their own
skills are strong, and the expanding array of educational offerings available today allows such investment to be as
occupationally focused as desired and to take place at any point in an individual's life.
Although education and the acquisition of skills is a lifelong process, starting early in life is crucial. Recent research--
some sponsored by the Federal Reserve Bank of Minneapolis in collaboration with the University of Minnesota--has
documented the high returns that early childhood programs can pay in terms of subsequent educational attainment and
in lower rates of social problems, such as teenage pregnancy and welfare dependency.
11
The most successful early
childhood programs appear to be those that cultivate both cognitive and noncognitive skills and that engage families in
stimulating learning at home (Heckman, Stixrud, and Urzua, 2006).
To return to the themes I raised at the beginning, the challenge for policy is not to eliminate inequality per se but rather
to spread economic opportunity as widely as possible. Policies that focus on education, job training, and skills and that
facilitate job search and job mobility seem to me to be a promising means for moving toward that goal. By increasing
opportunity and capability, we help individuals and families while strengthening the nation's economy as well.

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(June). Washington: Census Bureau,www.census.gov/hhes/www/img/p60-191.pdf.

Footnotes
1. This result is calculated using the data on compensation per hour in the nonfarm business sector from the Bureau of
Labor Statistics, deflated by the price index for personal consumption expenditures from the national income and
product accounts.Return to text
2. Goldin and Margo (1992) find that wage inequality has been increasing at varying rates since 1950. Piketty and Saez
(2003) obtain a similar result for wage income since the mid-1950s; using a measure of total income excluding capital
gains, they find that inequality was more or less constant from the early 1950s until the early 1970s and rose thereafter.
By contrast, Weinberg (1996) found that family income inequality, as measured by the Gini index, had diminished
somewhat between 1947 and 1968, but had increased between 1968 and the early 1990s, when his sample period
ended. Return to text
3. The data are weekly earnings of full-time wage and salary workers aged twenty-five and older and are derived from
the Current Population Survey, published by the Bureau of Labor Statistics. The data are deflated by the price index for
personal consumption expenditures. Return to text
4. Other important measures of economic well-being include consumption and wealth. Some economists view
consumption as a better measure of economic well-being than labor compensation or income because consumption is a
more direct indicator of the standard of living and because, on the assumption that households consume according to
the income they expect to receive over the longer term, it may also be a better measure of a household's long-term
economic prospects. As with other measures of economic well-being, consumption has become increasingly unequal
over time, although at any point in time it is less unequally distributed than wages or income (Krueger and Perri, 2006).
Wealth--the difference between a household's assets (both physical and financial) and its liabilities--shows a slightly
different pattern. As we know from the Federal Reserve's triennial Survey of Consumer Finances, wealth is distributed
far more unequally than income, with about 33 percent of aggregate household net worth being held by the top 1
percent of families and with just 2-1/4 percent of wealth being held by the bottom half (Kennickell, 2006). However, the
relative shares of wealth held by the richest and poorest have changed very little over the past decade or so, in contrast
to the further widening in the distributions of wages, incomes, and consumption. Return to text
5. In general, measures of economic well-being (such as disposable income) that take account of taxes paid and
transfer payments received from the government show lower levels of inequality at any point in time than measures that
exclude such payments; the difference reflects the progressive nature of our system of taxes and transfers. However,
analysis of these broader measures indicates that, over time, tax and transfer policies have not materially altered the
general tendency toward greater inequality. Return to text
6. Data on the distribution of income in the top 1 percent comes from an update of Piketty and Saez (2003), available
at http://elsa.berkeley.edu/~saez/TabFig2004prel.xls.Return to text
7. Another respect in which snapshots of inequality may be misleading is that they are influenced by fluctuations in
income that are transitory and that hence have a smaller effect on long-term economic well-being. One study suggests
that, for men, about one-third of the rise in point-in-time earnings inequality during the 1970s and 1980s resulted from
an increase in the transitory variation in wages (Moffitt and Gottschalk, 2002). The proper interpretation of these short-
lived changes in earnings is not clear. To the degree that they are associated with factors such as job changes, moves,
or entry into or exit from schooling, temporary variations in individual incomes could signify a healthy labor market. On
the other hand, such variations would be of greater concern if they reflected a higher incidence of factors such as short
periods of unemployment or loss of income due to health problems. Return to text
8. Recently, the Red Sox paid $51 million simply for the right to negotiate with the Japanese pitcher Daisuke Matsuzaka;
they later signed Matsuzaka for an additional $52 million over six years. Illustrating some of the effects of globalization
on baseball economics, the city of Boston anticipates that increased interest by Japanese tourists will bring in some $75
million, aside from what the Red Sox will earn from signing Matsuzaka (Reed, 2006). Return to text
9. For an opposing view, see Grossman and Rossi-Hansberg (2006). Return to text
10. Surveys of workers displaced from jobs because their plant closed or moved show that rates of such job loss
fluctuated only a little, on balance, from 1983 to 2003 despite the decline in unemployment over that period (Farber,
2005). A range of studies have yielded conflicting answers to the question of whether job stability and job insecurity
have changed over time, although the editor of a set of papers presented at a conference at the Federal Reserve Bank
of New York concluded that the relationship of employees and firms weakened some in the 1990s (Neumark,
2000). Return to text
11. More information on the Early Childhood Research Collaborative and copies of its research papers can be obtained
from the website of the Federal Reserve Bank of Minneapolis, http://www.earlychildhoodrc.org/. Return to text


Ngi Tahu using
financial literacy to
increase wellbeing
Community hub
6 November 2012
Collaborating with other agencies and sharing resources is a fundamental way of working for Ngi Tahu, and
the iwi is always looking for new ways to start a conversation about financial literacy.
Programme Advisor at Te Rnanga o Ngi Tahu Teone Sciascia, has been working with iwi members throughout the country for three years
promoting the importance of financial literacy and believes there is a desire for this type of learning.
Our work takes many different forms, some of the teaching we do is in a formal setting, sometimes it is a face to face conversation on a
marae where we distribute resources. There we see firsthand where members are struggling.
Mr Sciascia says the iwi is working with a number of organisations to develop high quality financial literacy resources that are fit for many
purposes.
We work with ANZs MoneyMinded programme making it relevant to our members by using the core concepts and putting in a Mori
context. Members of the community have been trained throughout the South Island to facilitate the learning, Mr Sciascia says.
During Money Week, Ngi Tahu worked with seven primary schools in the South Island, and hope to develop deeper relationships with the
schools and promote financial literacy programmes in the school communities.
We provided the schools with resources about money, book keeping and making better decisions. It was the first time we had gone into
schools to talk about financial literacy and it worked well. Its important to talk to kids about money and we hope their learning is
reinforced at home through other financial literacy initiatives, says Mr Sciascia.
Following their 1998 Treaty of Waitangi Settlement, Ngi Tahu looked for ways to distribute benefits that would contribute to the overall
wellbeing of iwi members. The result in 2006, was Whai Rawa, an investment savings scheme with a range of membership. Mr Sciascia
says the iwi recognised at an early stage the importance of financial independence and how this would benefit future generations.
We knew that developing a financial product alone would not be enough to improve the general financial wellbeing of our iwi. To be
successful, members needed to be able to understand how Whai Rawa worked, what the benefits were and how to get the most out of it.
Currently just over a third of our members are part of Whai Rawa. We want our children and our grandchildren to build financially secure
futures, and increasing our overall wellbeing remains our motivation.
Our members are interested in learning about money. When we started, our focus was on basic concepts but we quickly realised theres
also an appetite for more advanced learning around investment and compound interest.
We see firsthand the financial struggles and questions our members have. They often dont know where they can go to for help so we fill
that gap, he says.

TACKLING INCOME INEQUALITY IN THE UNITED STATES THROUGH
FINANCIAL LITERACY PROGRAMS
The income gap between whites and blacks more than quadrupled between 1984 and 2007, and a quarter of black families
have no assets at all, according to the BBC. The story goes on to describe several community development programs aimed at
providing financial literacy and budget training for African-American women in the state of South Carolina. The article interviews
beneficiaries and founders of several initiatives to lift African American
women, particularly mothers in single-parent families, out of poverty, to
break the cycle of intergenerational poverty.

Kenya Williams is a 35-year-old single mother who has benefited from the
help of the ALIVE community development corporations classes on basic
book-keeping in Allendale County, where unemployment is double the
national average. She earns $330 a week for her family of three girls and
makes ends meet week by week, paycheck to paycheck. Natisha Boston,
another single mother of three and a resident of North Charleston, has been
helped by courses on credit-lending education and home-ownership
programs at the Metanoia Community Development Corporation.

CESRs 2010 fact sheet on the United States reveals alarming disparities in income levels, as well as access to health and
education, among ethnic groups, with women facing compound effects. Among Asian, black, Hispanic/Latino and white groups,
for example, black women experienced the highest working poor rates (income less than $21,756 for a family of four in 2009),
at 11.6 percent, almost seven percent higher than their white female counterparts. Furthermore, the southern states as a
region also have some of the highest rates of poverty incidence in the country.

This figure, among others in the fact sheet, suggest that wages are too low to ensure an adequate standard of living and that
discrimination exists in the enjoyment of economic and social rights in the United States. The country, despite being the worlds
wealthiest economy, has one of the highest income inequalities and poorest records of economic and social rights achievement
of all high-income countries. The United States, which has signed by not yet ratified the International Covenant on Economic,
Social and Cultural Rights, will appear for the first time before the Universal Periodic Review of the UN Human Rights Council
in November 2010.

Papers by Annamaria Lusardi
PUBLICATIONS AND WORKING PAPERS
FINANCIAL LITERACY, PLANNING AND SAVINGS
Financial Sophistication in the Older Population joint with Olivia Mitchell (Wharton School) and Vilsa
Curto (Stanford University), January 2012.
Financial Literacy and the Financial Crisis joint with Leora Klapper (World Bank) and Georgios Panos
(Essex School of Business), January 2012.
"Numeracy, Financial Literacy, and Financial Decision-Making", Numeracy, January 2012.
Financial Literacy: Implications for Retirement Security and the Financial Marketplace, Oxford University
Press, 2011.
o The Outlook for Financial Literacy, joint with Olivia Mitchell (Wharton School, University of
Pennsylvania). Chapter 1, pp. 1-13.
o Financial Literacy and Planning: Implications for Retirement Wellbeing, joint with Olivia Mitchell
(Wharton School, University of Pennsylvania). Chapter 2, pp. 17-39.
Financial Literacy around the World (FLat World): Special Issue of the Journal of Pension Economics and
Finance, Fall 2011
o "Financial Literacy around the World, an Overview", with Olivia Mitchell. Journal of Pension
Economics and Finance. October 2011 10(4): pp 497-508.
o "Financial Literacy and Retirement Planning in the United States," with Olivia Mitchell. Journal of
Pension Economics and Finance. October 2011 10(4): pp 509-525.
o "Financial Literacy and Retirement Planning in the Netherlands," with Rob Alessie and Maarten
Van Rooij. Journal of Pension Economics and Finance. October 2011 10(4): pp 527-545.
o "Financial Literacy and Retirement Preparation in Germany", with Tabea Bucher-Koenen.Journal
of Pension Economics and Finance. October 2011 10(4): pp 565-584.
Financial Literacy and Retirement Planning in the Netherlands" with Maarten C.J. van Rooij and Rob J.M.
Alessie. Journal of Economic Psychology. 32 (2011) 593608.
Financial literacy and stock market participation" with Maarten C.J. van Rooij and Rob J.M.
Alessie.Journal of Financial Economics 101 (2011) 449472
Financial Literacy, Retirement Planning, and Household Wealth" with Maarten C.J. van Rooij and Rob
J.M. Alessie. Forthcoming in Economic Journal.
Financially Fragile Households: Evidence and Implications" with Peter Tufano (University of Oxford) and
Daniel Schneider (Princeton University), Brookings Papers on Economic Activity, Spring 2011, pp. 83-
134,
Five Steps to Planning Success, joint with A. Heinberg, A. Hung A. Kapteyn, and J. Yoong, Rand
Working Working n. 790, October 2010.
"The Economic Crisis and Medical Care Usage," with Peter Tufano (University of Oxford) and Daniel
Schneider (Princeton University), NBER Working Paper, 15843, March 2010
Employee Retirement Savings: What We Know and What We are Discovering for Helping People to
Prepare for Life After Work, with Punam Keller, in David Mick, Simone Pettigrew, Connie Pechmann, and
Julie Ozanne (eds.), Transformative Consumer Research for Personal and Collective Well Being:
Reviews and Frontiers, Taylor and Francis Group, pp. 439-458, 2010.
"Financial Literacy among the Young," with Olivia S. Mitchell, and Vilsa Curto, Journal of Consumer
Affairs, vol. 44(2), pp. 358-380, 2010.
Just the Facts
"How Ordinary Consumers Make Complex Economic Decisions: Financial Literacy and Retirement
Readiness," with Olivia Mitchell (Wharton School) March 2009
"Debt Literacy, Financial Experience and Overindebtedness," joint with Peter Tufano (University of
Oxford), Working Paper, March 2009.
Just the Facts
Financial Literacy: An Essential Tool for Informed Consumer Choice? June 2008, Working Paper,
Dartmouth College.
New Ways to Make People Save: A Social Marketing Approach,, joint with Punam Keller and Adam M
Keller, in A. Lusardi (ed.), Overcoming the Saving Slump: How to Increase the Effectiveness of Financial
Education and Saving Programs, University of Chicago Press, Chicago, IL, 2008, pp. 209-236.
"Planning and Financial Literacy: How Do Women Fare?," joint with Olivia Mitchell (Wharton School,
University of Pennsylvania), American Economic Review, 98(2), pp. 413-417.
Increasing the Effectiveness of Financial Education in the Work-Place, in Taking Financial Literacy to
the Next Level: Important Challenges and Promising Solutions, Volume I, OECD, 2009, pp. 41-48.
Baby Boomer Retirement Security: The Roles of Planning, Financial Literacy, and Housing Wealth, joint
with Olivia Mitchell (Wharton School, University of Pennsylvania), Journal of Monetary Economics,
January 2007, vol. 54, pp. 205-224.
Winner of the Fidelity Pyramid Prize, 2007, awarded to authors of published applied research that best helps address the goal of improving lifelong
financial well-being for Americans.
Financial Literacy and Retirement Preparedness: Evidence and Implications for Financial Education,
joint with Olivia Mitchell (Wharton School, University of Pennsylvania), Business Economics, January
2007, vol. 42(1) pp. 35-44.
Saving Between Cohorts: The Role of Planning," joint with Jason Beeler in B. Madrian, O. Mitchell, and
B. Soldo (eds.), Redefining Retirement: How Will Boomers Fare? Oxford University Press, 2007, pp. 271-
295.
U.S. Household Savings Behavior: The Role of Financial Literacy, Information and Financial Education
Programs, in C. Foote, L Goette, and S. Meier (eds), Policymaking Insights from Behavioral
Economics, Federal Reserve Bank of Boston, 2009, pp. 109-149.
Financial Literacy and Retirement Planning: New Evidence from the Rand American Life Panel, joint
work with Olivia Mitchell Wharton School, University of Pennsylvania). October 2007, MRRC Working
Paper No. 2007-157. A summary
Saving and the Effectiveness of Financial Education, Pension Design and Structure: New Lessons from
Behavioral Finance, edited by O. Mitchell and S. Utkus, Oxford University Press, 2004, pp. 157-184.
Reprinted in the Journal of Financial Transformation, issue on Wealth, Volume 15, December 2005.
"Financial Education and the Saving Behavior of African-American and Hispanic Households," 2005.
Planning and Savings for Retirement Working Paper, Dartmouth College, 2003.
Preparing for Retirement: The Importance of Planning Costs, National Tax Association Proceedings,
2002, pp. 148-154.
Saving for Retirement: the Importance of Planning, TIAA-CREF Institute, Issue n. 66, December 2000.
"Information, Expectations, and Savings for Retirement," in Henry Aaron (ed.), Behavioral Dimensions of
Retirement Economics, Washington, D.C.: Brookings Institution Press and Russell Sage Foundation,
1999, pp. 81-115.
ENTREPRENEURSHIP
"Heterogeneity in the Effect of Regulation on Entrepreneurship and Entry Size," with Silvia
Ardagna,Journal of the European Economic Association Papers and Proceedings, 2010.
"Where does regulation hurt? Evidence from new businesses across countries," joint with Silvia Ardagna
(Harvard University), NBER Working Paper n. 14747, February 2009.
"Explaining International Differences in Entrepreneurship: The Role of Individual Characteritics and
Regulatory Constraints," joint with Silvia Ardagna (Harvard University), in International Differences in
Entrepreneurship, edited by Joshua Lerner and Antoinette Schoar, 2009.
Liquidity Constraints, Household Wealth, and Entrepreneurship, joint with Erik Hurst (University of
Chicago Graduate School of Business), Journal of Political Economy, April 2004, Vol. 112(2), pp. 319-
347.
"Liquidity Constraints and Entrepreneurship. Household Wealth, Parental Wealth, and the Transition In
and Out of Entrepreneurship," joint with Erik Hurst (University of Chicago Graduate School of Business),
in Overcoming Barriers to Entrepreneurship, Lexington Books, Lanham MD, 2008, pp. 47-68.
PRECAUTIONARY SAVING
"The Importance of Business Owners in Assessing the Size of Precautionary Savings," joint with Erik
Hurst (University of Chicago GSB), Arthur Kennickell (Board of Governors) and Francisco Torralba
(University of Chicago), Review of Economics and Statistics, February 2011, vol. 92, pp. 61-69.
Robustness Appendix
Disentangling the Importance of the Precautionary Saving Motive," joint with Arthur Kennickell (Board of
Governors), Working Paper, Dartmouth College, 2004.
"On the Importance of the Precautionary Saving Motive," American Economic Review, May 1998, vol.
88(2), pp. 449-453.
"Precautionary Saving and Subjective Earnings Variance," Economics Letters, December 1997, vol.
57(3), pp. 319-326.
COMPREHENSIVE SURVEY ON SAVING
"Household Saving: Micro Theories and Micro Facts," joint with Martin Browning, Journal of Economic
Literature, December 1996, vol. 34, pp. 1797-1855.
SOCIAL SECURITY
"Explaining the Wealth Holdings of Different Cohorts: Productivity Growth and Social Security," joint with
Rob Alessie and Arie Kapteyn, July 2005, European Economic Review, vol 49, pp 1361-1381.
CONSUMPTION
"Permanent Income, Current Income and Consumption: Evidence from Two Panel Data Sets,"Journal of
Business and Economic Statistics, January 1996, vol. 14(1), pp. 81-90.
"Excess Sensitivity and Asymmetries in Consumption: An Empirical Investigation," joint with Ren Garcia
and Serena Ng, Journal of Money, Credit and Banking, May 1997, vol. 29(2), pp. 154-176.
"Consumption, Saving and Habit Formation," joint with Rob Alessie, Economics Letters, August 1997, vol.
55(1), pp. 103-108.
PUBLIC POLICY AND SAVINGS
Adequacy of Saving for Old Age in Europe, joint with Elsa Fornero and Chiara Monticone, in L.
Bovemberg, A. van Soest, and A Zaidi (eds.), Ageing, Health and Pensions in Europe. An Economic and
Social Policy Perspective, Palgrave Macmillan, pp. 13-37, 2010.
Saving, Public Policy and Late-Life Inequality, joint with Jonathan Skinner and Steven Venti, in S.
Crystal and D. Shea (eds.), Annual Review of Gerontology and Geriatrics, 2002, pp. 207-238.
"Saving Puzzles and Saving Policies in the United States joint with Jonathan Skinner and Steven
Venti, Oxford Review of Economic Policy, Spring 2001, 17(1), 95-115. NBER Working Paper 8237.
Pension Accounting and Personal Saving, joint with Jonathan Skinner and Steven Venti, in Just the
Facts on Retirement Issues, Center for Retirement Research at Boston College, 2003.
Increasing Saving among the Poor: The Role of Financial Literacy, Poverty Research News,
Northwestern/University of Chicago Joint Center for Poverty Research, January-February 2002, vol. 6(1).
SAVING ACROSS COUNTRIES
Saving: A Cross-National Perspective, joint with Axel Borsch-Supan in A. Borsch-Supan (ed.), Life-
Cycle Savings and Public Policy: A Cross-National Study in Six Countries, Academic Press, 2003, pp. 1-
31.
Review of the book: Understanding Saving: Evidence from the United States and Japan," by Fumio
Hayashi, MIT Press, 1997, Southern Economic Journal, July 1998, vol. 65, pp. 198-202.
THE DECLINE IN SAVING RATES
Discussion of the paper: "Spendthrift in America? On Two Decades of Decline in the U.S. Personal
Saving," in B. Bernanke and J. Rotemberg (eds.), NBER Macroeconomics Annual 1999, pp. 374-386.
SAVING OVER THE LIFE CYCLE
Savings of Young Parents (2001), joint with Ricardo Cossa and E. Krupka, Journal of Human
Resources, Fall 2001, 36(4), pp. 762-794.
"Saving after Retirement: Evidence from Three Different Surveys," joint with Rob Alessie and Arie
Kapteyn, Labour Economics, June 1999, vol. 6(2), pp. 277-310.
"Saving and Income Smoothing: Evidence from Panel Data," joint with Rob Alessie, European Economic
Review, July 1997, vol. 41, pp. 1251-1279.
"Income and Wealth over the Life Cycle: Evidence from Panel Data," joint with Rob Alessie and Trea
Aldershof, Review of Income and Wealth, March 1997, vol. 43(1), pp. 1-32.
"Saving and Wealth Holdings of the Elderly," joint with Rob Alessie and Arie Kapteyn, Research in
Economics, September 1995, vol. 49, pp. 293-315.
CREDIT MARKETS AND THE LABOR MARKET
"Credit Market Constraints and Labor Market Decisions," joint with Daniela Del Boca, Labour Economics,
December 2003, vol. 10, pp. 681-703.

Hows Life?
Norway performs exceptionally well in overall well-being, as shown by the fact that it ranks among the top countries in a large
number of topics in the Better Life Index.
Money, while it cannot buy happiness, is an important means to achieving higher living standards. In Norway, the average
person earns 30 465 USD a year, more than the OECD average of 22 387 USD a year. But there is a considerable gap
between the richest and poorest the top 20% of the population earn four times as much as the bottom 20%.
In terms of employment, over 75% of people aged 15 to 64 in Norway have a paid job, above the OECD employment
average of 66%. Some 77% of men are in paid work, compared with 73% of women. People in Norway work 1 414 hours a
year, less than most people in the OECD who work 1749 hours. Only 3% of employees work very long hours, much lower than
the OECD average of 9%, with 4% of men working very long hours compared with just 1% for women.
Having a good education is an important requisite for finding a job. In Norway, 81% of adults aged 25-64 have earned the
equivalent of a high-school degree, higher than the OECD average of 74%. This is equally true of men and women. In terms
of the quality of the education system, the average student scored 500 in reading literacy, maths and science in the OECDs
Programme for International Student Assessment (PISA), slightly higher than the OECD average of 497. On average in Norway,
girls outperformed boys by 15 points, higher than the average OECD gap of 9 points.
In terms of health, life expectancy at birth in Norway is 81 years,one year higher than the OECD average of 80 years. Life
expectancy for women is 83 years, compared with 79 for men. The level of atmospheric PM10 tiny air pollutant particles
small enough to enter and cause damage to the lungs is 16 micrograms per cubic meter,considerably lower than the OECD
average of 22 micrograms per cubic meter. Norway also does well in terms of water quality, as 95% of people say they are
satisfied with the quality of their water.
Concerning the public sphere, there is a strong sense of community and high levels of civic participation in Norway, where 94%
of people believe that they know someone they could rely on in time of need, higher than the OECD average of
91%. Voter turnout, a measure of public trust in government and of citizens participation in the political process, was 77%
during recent elections, higher than the OECD average of 73%. Social and economic status can affect voting rates; voter
turnout for the top 20% of the population is 82% and for the bottom 20% it is 70%, broader than the OECD average gap of 7%
and suggesting there is room for broader social inclusion in Norways democratic institutions
In general, Norwegians are more satisfied with their lives than the OECD average, with 86% of people saying they have more
positive experiences in an average day (feelings of rest, pride in accomplishment, enjoyment, etc) than negative ones (pain,
worry, sadness, boredom, etc). This figure is higher than the OECD average of 80%.


Hows Life?
Norway performs exceptionally well in overall well-being, as shown by the fact that it ranks among the top countries in a large number of
topics in the Better Life Index.
Money, while it cannot buy happiness, is an important means to achieving higher living standards. In Norway, the average person earns 30
465 USD a year, more than the OECD average of 22 387 USD a year. But there is a considerable gap between the richest and poorest the
top 20% of the population earn four times as much as the bottom 20%.
In terms of employment, over 75% of people aged 15 to 64 in Norway have a paid job, above the OECD employment average of 66%.
Some 77% of men are in paid work, compared with 73% of women. People in Norway work 1 414 hours a year, less than most people in the
OECD who work 1749 hours. Only 3% of employees work very long hours, much lower than the OECD average of 9%, with 4% of men
working very long hours compared with just 1% for women.
Having a good education is an important requisite for finding a job. In Norway, 81% of adults aged 25-64 have earned the equivalent of a
high-school degree, higher than the OECD average of 74%. This is equally true of men and women. In terms of the quality of the education
system, the average student scored 500 in reading literacy, maths and science in the OECDs Programme for International Student
Assessment (PISA), slightly higher than the OECD average of 497. On average in Norway, girls outperformed boys by 15 points, higher
than the average OECD gap of 9 points.
In terms of health, life expectancy at birth in Norway is 81 years,one year higher than the OECD average of 80 years. Life expectancy for
women is 83 years, compared with 79 for men. The level of atmospheric PM10 tiny air pollutant particles small enough to enter and
cause damage to the lungs is 16 micrograms per cubic meter,considerably lower than the OECD average of 22 micrograms per cubic
meter. Norway also does well in terms of water quality, as 95% of people say they are satisfied with the quality of their water.
Concerning the public sphere, there is a strong sense of community and high levels of civic participation in Norway, where 94% of people
believe that they know someone they could rely on in time of need, higher than the OECD average of 91%. Voter turnout, a measure of
public trust in government and of citizens participation in the political process, was 77% during recent elections, higher than the OECD
average of 73%. Social and economic status can affect voting rates; voter turnout for the top 20% of the population is 82% and for the
bottom 20% it is 70%, broader than the OECD average gap of 7% and suggesting there is room for broader social inclusion in Norways
democratic institutions
In general, Norwegians are more satisfied with their lives than the OECD average, with 86% of people saying they have more positive
experiences in an average day (feelings of rest, pride in accomplishment, enjoyment, etc) than negative ones (pain, worry, sadness,
boredom, etc). This figure is higher than the OECD average of 80%.
8
inShare
Topics
Housing
7.5
Income
3.9
Jobs
8.8
Community
8.5
Education
7.3
Environment
9.2
Civic Engagement
6.3
Health
8.5
Life Satisfaction
9.2
Safety
8.9
Work-Life Balance
8.8

OECD in Action

OECD Economic Surveys: Norway 2012
OECD's 2012 Economic Survey of Norway examines recent economic developments, policies and prospects, value for money and public
spending, and capital tax reform.
Read this report
Find Out More
March 5, 2013
Mental Health and Work: Norway
Read this report
January 8, 2013
Quality Matters in Early Childhood Education and Care: Norway 2013
Read this report
September 26, 2012
Science and innovation: Norway
Read this chapter
Archive
Norway in Detail
Housing
Key Findings
Living in satisfactory housing conditions is one of the most important aspects of peoples lives. Housing is essential to meet basic needs,
such as shelter, but it is not just a question of four walls and a roof. Housing should offer a place to sleep and rest where people feel safe and
have privacy and personal space; somewhere they can raise a family. All of these elements help make a house a home. And of course there
is the question whether people can afford adequate housing.
Housing costs take up a large share of the household budget and represent the largest single expenditure for many individuals and families,
by the time you add up elements such as rent (or loan repayments for those buying their own home), gas, electricity, water, furniture or
repairs In Norway, households on average spend 19% of their net disposable income on keeping a roof over their heads, below the
OECD average of 22%.
In addition to housing costs it is also important to examine living conditions, such as the average number of rooms shared per person and
whether households have access to basic facilities. In Norway,91% of people say they are satisfied with their current housing situation,
higher than the OECD average of 87%. This high level of subjective satisfaction reflects Norways good performance in objective housing
indicators.
The number of rooms in a dwelling, divided by the number of persons living there, indicates whether residents are living in crowded
conditions. Overcrowded housing may have a negative impact on physical and mental health, relations with others and the development of
children. In addition, dense living conditions are often a sign of inadequate water and sewage supply. In Norway, the average home
contains 2.0 rooms per person, more than the OECD average of 1.6 rooms per person. In terms of basic facilities, an estimated 99.9% of
people in Norway live in dwellings with private access to indoor flushing toilets, higher than the OECD average 97.8%.
More Resources
How's Life?: Housing Conditions
Read this report
Housing and the Economy: Policies for Renovation
Read this report
Indicators
Housing expenditure
19%
Rank:
6 / 36
Trend


-0.7%
average annual increase
since 1995
Dwelling with basic facilities
99.90%
Rank:
7 / 36
Trend


+0.1%
average annual increase
since 2004
Rooms per person
2 rooms
Rank:
8 / 36
Trend


+0.9%
average annual increase
since 2004
Income
Key Findings
While money may not buy happiness, it is an important means to achieving higher living standards and thus greater well-being. Higher
economic wealth may also improve access to quality education, healthcare and housing.
Household net-adjusted disposable income is the amount of money that a household earns each year after tax. It represents the money
available to a household for spending on goods or services. In Norway, the average household net-adjusted disposable income is 30 465
USD a year, higher than the OECD average of 22 387USD.
Household financial wealth is the total value of a households financial worth. In Norway, the average household wealth is estimated at 6
197 USD, lower than the OECD average of 36 238 USD. While the ideal measure of household wealth should include real assets (e.g. land
and dwellings), such information is currently available for only a small number of OECD countries.
Despite a general increase in living standards across OECD countries over the past fifteen years, not all people have benefited from this to
the same extent. In Norway, the income of the top 20% of the population is 52 444 USD a year, whereas the bottom 20% live on 14
142 USD a year.
Better Policies for Better Lives
Redistribution for an egalitarian society
Norways society is built on the model of a relatively egalitarian society, where social consensus and a high degree of inclusiveness are
important, and there is a high level of social cohesion. Wage inequality is low, and redistribution through the tax and benefit system is large,
so that the distribution of net income is even more egalitarian.
Norways progressive tax system, which includes quite a high wealth tax, raises a lot of revenue, helping to reduce income inequality,
without excessively undermining economic performance. However, taxation varies across different types of income and the low levels of
property taxation combined with very high tax rates on some capital income are likely to depress non-housing investment. The harsh tax
treatment of bank interest particularly affects poorer households who are more likely to use this type of savings instrument.
The government could reform the taxation of capital and align tax rates across different types of income to improve economic efficiency
through greater tax neutrality without reducing the overall degree of redistribution.
More Resources
How's Life?: Income and Wealth
Read this report
National Accounts at a Glance 2010
Read this report
Indicators
Household financial wealth
6197 USD
Rank:
35 / 36
Trend


+0.3%
average annual increase
since 1995
Household net adjusted disposable income
30465 USD
Rank:
3 / 36
Trend


+2.8%
average annual increase
since 1995
Social Inequality
3.7
rich
poor
Rank:
5 / 35
Jobs
Key Findings
Having a job brings many important benefits, including: providing a source of income, improving social inclusion, fulfilling ones own
aspirations, building self-esteem and developing skills and competencies. In Norway, more than 75% of the working-age population
aged 15 to 64 has a paid job. This figure is much higher than the OECD employment average of 66%. Employment rates are generally
higher for the better-off in society than the worst-off; in Norway 90% of the top 20% of the population has a paid job, compared with 59%
for the bottom 20%. This 31% difference is slightly lower than the OECD average 35% and suggests the job market in Norway is relatively
inclusive.
Women are still less likely than men to participate in the labour market. In Norway, 73% of women have jobs. This is more than the OECD
average of 59% andrelatively close to the 77% employment rate of men in Norway. This 4% gender difference is much lower than the
OECD average of 13% and suggests Norway has been successful in addressing the constraints and barriers women face accessing work.
Young Norwegians aged 15-24, face an unemployment rate of 9.3%, compared with the OECD average of 16.7%.
Unemployed persons are defined as those who are not currently working but are willing to do so and actively searching for work. Long-term
unemployment can have a large negative effect on feelings of well-being and self-worth and result in a loss of skills, further reducing
employability. In Norway, the percentage of the labour force that has been unemployed for a year or longer is currently at 0.3%,
much lower than the OECD average of 3.0%. There is little difference on average between men and women in the OECD area when it
comes to long-term unemployment. In Norway, the long-term unemployment rate for men is slightly higher than for women, with
respectively 0.4% and 0.2%.
The wages and other monetary benefits that come with employment are an important aspect of job quality. In Norway, people earn 44 164
US dollars per year on average, higher than the OECD average 34 033 US dollars. Not everyone earns that amount however. Whereas the
top 20% of the population earn 65 116 US dollars per year, the bottom 20% live on 22 754 per year.
Another essential factor of employment quality is job security. Employees working on temporary contracts are more vulnerable than
workers with an open-ended contract. In Norway, close to 8% of total employees have a contract of 6 months or less, slightly lower than
the OECD-30 average of 10%. This figure suggests Norway has been successful in stabilising working contracts and encouraging open-
ended contracts.
More Resources
OECD Employment Outlook 2011
Read this report
How's Life?: Jobs and Earnings
Read this report
Indicators
Job security
7.72%
Rank:
12 / 36
Gender Inequality
1.1
men
women
Rank:
14 / 31
Personal earnings
44164 USD
Rank:
7 / 36
Trend


+2.4%
average annual increase
since 2005
Gender Inequality
1.2
men
women
Rank:
10 / 30
Social Inequality
2.9
rich
poor
Rank:
3 / 30
Long-term unemployment rate
0.34%
Rank:
3 / 36
Trend


-8.1%
average annual increase
since 1995
Gender Inequality
1.9
men
women
Rank:
30 / 34
Social Inequality
4.7
rich
poor
Rank:
28 / 32
Employment rate
75%
Rank:
3 / 36
Trend


+0.2%
average annual increase
since 1995
Gender Inequality
1.1
men
women
Rank:
4 / 36
Social Inequality
1.5
rich
poor
Rank:
11 / 33
Community
Key Findings
Humans are social creatures. The frequency of our contact with others and the quality of our personal relationships are thus crucial
determinants of our well-being. Helping others can also make you happier. People who volunteer tend to be more satisfied with their lives
than those who do not. Time spent volunteering also contributes to a healthy civil society. On average, people in Norway spend 2 minutes
per day in volunteering activities, lower than the OECD average of 4 minutes per day . Nearly 49% reported having helped a stranger
in the last month, close to the OECD average of 47% .
A strong social network, or community, can provide emotional support during both good and bad times as well as provide access to jobs,
services and other material opportunities. In Norway, 94% of people believe that they know someone they could rely on in a time of
need, higher than the OECD average of 91%. There is little difference between men and women, as94% of men believe they have this
kind of social support, compared with 93% of women. There is also little difference in the availability of social support depending on
peoples socioeconomic status in Norway, where around 91% of the bottom 20% report having someone to count on for help in times
of need, compared to 94% for the top 20%.

More Resources
Hows Life?: Social Connections
Read this report
Society at a Glance: Social Isolation
Read this report
OECD Insights: Human Capital
Download this report
Indicators
Quality of support network
94%
Rank:
14 / 36
Gender Inequality
1.0
men
women
Rank:
9 / 36
Social Inequality
1.0
rich
poor
Rank:
10 / 35
Education
Key Findings
A well-educated and well-trained population is essential for a countrys social and economic well-being. Education plays a key role in
providing individuals with the knowledge, skills and competences needed to participate effectively in society and in the economy. Most
concretely, having a good education greatly improves the likelihood of finding a job and earning enough money. Across OECD countries,
men with university-level degrees are 18% more likely to find jobs, and women are 32% more likely. Lifetime earnings also increase with
each level of education.
Following a decline in manual labour over previous decades, employers now favour a more educated labour force. High-school graduation
rates therefore provide a good indication of whether a country is preparing its students to meet the minimum requirements of the job market.
In Norway, 81% of adults aged 25-64 have earned the equivalent of a high-school degree, higher than the OECD average of 74%. This
is equally true of men and women. Among younger people a better indicator of Norways future 84% of 25-34 year-olds have earned
the equivalent of a high-school degree, also higher than the OECD average of 81% .
Norwegians can expect to go through 18 years of education between the ages of 5 and 39, more than the OECD average of 17 years. This
high level of education expectancy echoes Norways good performance in the educational attainment of its 25-34 year-old population.
But graduation rates, while important, speak little to the quality of education received. The OECDs Programme for International Student
Assessment (PISA) reviews the extent to which students have acquired some of the knowledge and skills that are essential for full
participation in modern societies. In 2009, PISA focused on examining students reading ability, skills in maths and level in sciences, as
research shows that these skills are more reliable predictors of economic and social well-being than the number of years spent in school.
The average student in Norway scored 500 in reading literacy, maths and sciences, higher than the OECD average of 497. On
average, girls outperformed boys by 15 points, more than the average OECD gap of 9 points.
The best-performing school systems manage to provide high-quality education to all students . In Norway, the average difference in
results, between the top 20% and bottom 20%, is of 77 points, lower than the OECD average of 99 points and one of the smallest gaps
amongst OECD countries. This suggests the school system in Norway provides relatively equal access to high-quality education.
Better Policies for Better Lives
Establishing career incentives in Norway
In Norway, governments and unions have co-operated to enhance and recognize teachers competence. The Union of Education Norway
(UEN) had long considered that there were too few career incentives for teachers. Existing career structures meant that teachers stopped
teaching or taught less when they entered positions of educational leadership. In the 2008, the UEN suggested introducing a new and higher
wage scale for teachers on the basis of competence. The suggestion was accepted, and procedures were agreed to promote and retain highly
competent teachers, as identified by the school leader.
Additionally, the UEN formed a partnership with the Norwegian Ministry of Education and other organizations to introduce a system of
ongoing education for teachers. Around 2 000 full-time study places in colleges and universities have been set aside for full- or part-time
studies. Teachers who participate are granted leave of absence with full pay for 80% of normal study time. Costs for substitute teachers are
shared between the central government and the local employer.

More Resources
Education at a Glance 2011: Highlights
Download this report
PISA 2009 Results: What Students Know and Can Do
Read this report
Building a High-Quality Teaching Profession
Download this report
Indicators
Years in education
17.8 years
Rank:
13 / 36
Gender Inequality
1.1
men
women
Rank:
24 / 35
Student skills
500 score
Rank:
14 / 36
Gender Inequality
1.0
men
women
Rank:
28 / 36
Social Inequality
1.2
rich
poor
Rank:
7 / 36
Educational attainment
81%
Rank:
16 / 36
Trend


-0.6%
average annual increase
since 2000
Gender Inequality
1.0
men
women
Rank:
2 / 35
Environment
Key Findings
The quality of our local living environment has a direct impact on our health. Having access to green spaces for example, is essential for
quality of life. An unspoiled environment is a source of satisfaction, improves mental well-being, allows people to recover from the stress of
everyday life and to perform physical activity. In Norway, 2% of people feel they lack access to green spaces, much less than the
European average of 12%.
Outdoor air pollution is one important environmental issue that directly affects the quality of peoples lives. Despite national and
international interventions and decreases in major pollutant emissions, the health impacts of urban air pollution continue to worsen withair
pollution set to become the top environmental cause of premature mortality globally by 2050.
Air pollution in urban centres, often caused by transport and the use of small-scale burning of wood or coal, is linked to a range of health
problems, from minor eye irritation to upper respiratory symptoms in the short-term and chronic respiratory diseases such as asthma,
cardiovascular diseases and lung cancer in the long-term. Children and the elderly may be particularly vulnerable.
PM10 tiny particulate matter small enough to be inhaled into the deepest part of the lung is monitored in OECD countries because it can
harm human health and reduce life expectancy. In Norway, PM10 levels are 15.9 micrograms per cubic meter, lower than the OECD
average of 22 micrograms per cubic meter. Total emissions of particulate matter (PM10) have reduced by 29% since 2000, mostly due to
lower emissions from fuel wood use; nevertheless, the use of wood for household heating is still the largest source, accounting for 60% of
PM10 emissions. Other sources include minerals and metals production (22%) and transport (10%), which includes exhaust, road dust and
tyre wear.
Access to clean water is fundamental to human well-being. Despite significant progress in OECD countries in reducing water pollution,
improvements in freshwater quality are not always easy to discern. In Norway, 95% of people say they are satisfied with water quality.
This score is much higher than the OECD average of 85% and suggests Norway has been successful in providing good quality water to its
inhabitants.
More Resources
Environmental Performance Review 2011: Norway
Read this report
OECD Environmental Outlook to 2030
Read this report
Indicators
Water quality
95%
Rank:
8 / 36
Gender Inequality
1.0
men
women
Rank:
12 / 36
Social Inequality
1.0
rich
poor
Rank:
6 / 35
Air pollution
16 micrograms
Rank:
14 / 36
Trend


-1.6%
average annual increase
since 1990
Civic Engagement
Key Findings
A cohesive society is one where citizens have a high degree of confidence in their governmental institutions and public administration. In
Norway, 68% of people say they trust their political institutions, higher than the OECD average of 56%. High voter turnout is another
measure of public trust in government and of citizens participation in the political process. In the most recent elections for which data is
available, voter turnout in Norway was 77% of those registered. This figure is higher than the OECD average of 73%.
Even if the right to vote is universal in all OECD countries, not everyone exercises this right. While on average there are few differences
between men and women concerning participation in elections, income can have a strong influence on voter turnout. In Norway, voter
turnout for the top 20% of the population is close to 82%, whereas the participation rate of the bottom 20% is 70%. This 12% difference
is larger than the OECD average difference of 7% and suggests that broader social inclusion could be achieved.
Ensuring that government decision making is not compromised by conflicts of interest is key to maintaining trust in government.
Transparency is therefore essential to hold government to account and to maintain confidence in public institutions.
Freedom of information laws (FOI) allow the possibility for individuals to access undisclosed information. For such policies to be successful,
the public should have a clear understanding of their rights under the law, should be able to file requests with ease and should be protected
against any possible retaliation. People in Norway can file a request for information either in writing, online, by telephone or in person
thus greatly facilitating the FOI process. There are even provisions for anonymity an important protection that few OECD countries have
adopted. There is not yet, however, built-in protection from retaliation.
More Resources
Government at a Glance: Norway
Download this report
How's Life?: Civic Engagement & Governance
Read this report
Indicators
Consultation on rule-making
8.1 index
Rank:
14 / 36
Trend


+0.0%
average annual increase
since 2005
Voter turnout
77%
Rank:
17 / 36
Trend


-0.2%
average annual increase
since 1981
Gender Inequality
1.0
men
women
Rank:
1 / 30
Social Inequality
1.2
rich
poor
Rank:
21 / 29
Health
Key Findings
Most OECD countries have enjoyed large gains in life expectancy over the past decades, thanks to improvements in living conditions, public
health interventions and progress in medical care. In 2010, life expectancy at birth for the whole population in Norway stood at 81
years, above the OECD average of 80 years. Life expectancy for women is 83 years, compared with 79 for men, and compared with an
OECD average of 83 for women and 77 for men.
Higher life expectancy is generally associated with higher healthcare spending per person, although many other factors have an impact on
life expectancy (such as living standards, lifestyles, education and environmental factors). Total health spending accounted for 9.6% of
GDP in Norway in 2009, compared with an average of 9.7% across OECD countries. In terms of health spending per person, Norway
ranked the second highest among OECD countries in 2008 (after the United States), with spending of 5003 USD, well above the OECD
average of 3060 USD. Health spending per person in Norway increased, in real terms, by 1.7% per year on average between 2000 and 2008,
the second lowest growth rate of all OECD countries, and well below the OECD average (4.2%).
Throughout the OECD, tobacco consumption and excessive weight gain remain two important risk factors for many chronic diseases. In
Norway, the proportion of smokers among adults has been reduced from 36% in 1980 to 21% in 2008, slightly below the OECD average of
23%. Much of this decline can be attributed to policies aimed at reducing tobacco consumption through public awareness campaigns,
advertising bans and increased taxation. In Norway,the obesity rate among adults is 10.0%.
When asked, How is your health in general? 80% of people in Norway reported to be in good health, higher than the OECD average of
70%. Despite the subjective nature of this question, the answers have been found to be a good predictor of peoples future health care use .
Gender, age and social status may affect answer to this question. On average in OECD countries, men are more likely to report good health
than women, with an average of 72% for men and 67% for women. In Norway, the average is 82% for men and 78% for women. Not
surprisingly, older people report poorer health, as do those who are unemployed, or who have less education or income.
More Resources
OECD Health Data 2010: Norway
Download this report
Obesity and the Economics of Prevention
Read this report
How's Life?: Health Status
Read this report
Indicators
Self-reported health
80%
Rank:
8 / 36
Trend


-0.4%
average annual increase
since 2005
Gender Inequality
1.1
men
women
Rank:
13 / 34
Life expectancy
81.2 years
Rank:
10 / 36
Trend


+0.2%
average annual increase
since 1960
Gender Inequality
1.1
men
women
Rank:
8 / 36
Life Satisfaction
Key Findings
Happiness can be measured in terms of life satisfaction, the presence of positive experiences and feelings, and the absence of negative
experiences and feelings. Such measures, while subjective, are a useful complement to compare the quality of life across countries.
Life satisfaction measures how people evaluate their life as a whole rather than their current feelings. It captures a reflective assessment of
which life circumstances and conditions are important for subjective well-being. When asked to rate their general satisfaction with life on a
scale from 0 to 10,Norwegians gave it a 7.6 grade, higher than the OECD average of 6.7.
There is little difference in life satisfaction levels between men and women across OECD countries. This is true in Norway, where men
gave their life a 7.5 grade and women 7.6. Social status does, however, strongly influence subjective well-being. Whereas thebottom 20%
of the Norwegian population have a life satisfaction level of 7.3, this score reaches 7.8 for the top 20% .
Happiness, or subjective well-being, is also defined as the presence of positive experiences and feelings, and/or the absence of negative
experiences and feelings. In Norway, 86% of people reported having more positive experiences in an average day(feelings of rest, pride
in accomplishment, enjoyment, etc) than negative ones (pain, worry, sadness, boredom, etc). This figure is higher than the OECD average of
80%.
Better Policies for Better Lives
High levels of life satisfaction based on strong social cohesion
Norway scores highly in international comparisons of material well-being but also in other fields, such as community, environment and
safety, and overall life satisfaction.
These high scores may be related to the Norwegian model of a relatively egalitarian society, where social consensus and a high degree of
inclusiveness are important. Not only is wage inequality relatively low in Norway, redistribution through the tax and benefit system is also
substantial. The generous provision of public services, such as education and health, also plays a major role in Norwegians personal
fulfillment and well-being. Recent data shows about 25% of the economy is devoted to producing public goods and services.
Thanks to oil assets, government revenues have exceeded expenditures over the past decade, even during the recent fiscal crisis. Protected
from the worst of the crisis by this natural resource and a sound macroeconomic policy framework, Norway continues to enjoy high levels
of income and well-being.

More Resources
Hows Life?: Subjective Well-Being
Read this report
Society at a Glance: Social Indicators
Read this report
Indicators
Life satisfaction
7.6 rate
Rank:
2 / 36
Gender Inequality
1.0
men
women
Rank:
7 / 36
Social Inequality
1.1
rich
poor
Rank:
6 / 35
Safety
Key Findings
Personal security is a core element for the well-being of individuals, and largely reflects the risks of people being physically assaulted or
falling victim to other types of crime. Across the OECD, assault rates have generally declined in the past five years. In Norway, 3.3% of
people reported falling victim to assault over the previous 12 months, lower than the OECD average of 4.0%. There is little difference
between men and women in assault rates, at around 2%.

The homicide rate (the number of murders per 100,000 inhabitants) is a more reliable measure of a countrys safety level because, unlike
other crimes, murders are usually always reported to the police. According to the latest OECD data, Norways homicide rate is 0.6, lower
than the OECD average of 2.1 and one of the lowest in the OECD. In Norway, the homicide rate for men is 0.7 compared with 0.5 for
women.
Fear of crime is another important indicator as it can constrain behaviour, restrict freedom and threaten the foundation of communities.
Despite a general reduction in assault rates in the past five years, in many OECD countries feelings of security have declined. In Norway,
62% of people feel safe walking alone at night, slightly lower than the OECD average of 67%. While men are at a greater risk of being
victims of assaults and violent crimes, women report lower feelings of security than men . This has been explained by a greater fear of
sexual attacks, the feeling they must also protect their children and their concern that they may be seen as partially responsible .
Social status also has an impact on victimisation rates and perception of security. People with higher income and higher education usually
report higher feelings of security and face lower risks of crime. This can be explained by the fact they can afford better security and are less
exposed to criminal activity such as youth gangs or drug smuggling. In Norway, nevertheless, the assault rate is 1.4% higher for the top
20% than for the bottom 20% of the population.
More Resources
Hows Life?: Personal Security
Read this report
Society at a Glance: Victimisation Rates
Read this report
Indicators
Homicide rate
0.6 homicides
Rank:
4 / 36
Trend


-9.6%
average annual increase
since 2003
Gender Inequality
1.4
men
women
Rank:
8 / 36
Assault rate
3.25%
Rank:
16 / 36
Gender Inequality
1.9
men
women
Rank:
29 / 36
Social Inequality
2.6
rich
poor
Rank:
27 / 35
Work-Life Balance
Key Findings
Finding a suitable balance between work and life is a challenge for all workers, especially working parents. Some couples would like to
have (more) children, but do not see how they could afford to stop working. Other parents are happy with the number of children in their
family, but would like to work more. This is a challenge to governments because if parents cannot achieve their desired work/life balance,
not only is their welfare lowered but so is development in the country.
People spend one-tenth to one-fifth of their time on unpaid work . The distribution of tasks within the family is still influenced by gender
roles: men are more likely to spend more hours in paid work, while women spend longer on unpaid domestic work. Men in Norway, spend
152 minutes per day cooking, cleaning or caring, higher than the OECD average of 131 minutes but still less than Norwegian women
who spend 225 minutes per day on average on domestic work .
Another important aspect of work-life balance is the amount of time a person spends at work. Evidence suggests that long work hours may
impair personal health, jeopardize safety and increase stress. People in Norway work 1 414 hours a year, much lower than the OECD
average of 1 749 hours. The share of employees working more than 50 hours per week is not very large across OECD countries. In
Norway,some 3% of employees work very long hours, lower than the OECD average of 9%. Overall, men spend more hours in paid
work: in Norway 4% of men work very long hours, compared with 1% for women.
The more people work, the less time they have to spend on other activities, such as time with others or leisure. The amount and quality of
leisure time is important for peoples overall well-being, and can bring additional physical and mental health benefits. People in Norway
devote 68% of their day, or 15.6 hours, to personal care (eating, sleeping, etc.) and leisure(socializing with friends and family, hobbies,
games, computer and television use, etc.) higher than the OECD average of 14.8 hours. In Norway, men devote approximately 14 hours
per day to personal care and leisure and women 16 hours per day.
More Resources
How's Life?: Work and Life Balance
Read this report
Babies and Bosses - Key Outcomes of Norway
Read this report
Indicators
Time devoted to leisure and personal care
15.56 hours
Rank:
4 / 36
Gender Inequality
1.0
men
women
Rank:
6 / 19
Employees working very long hours
2.66%
Rank:
5 / 36
Trend


-4.3%
average annual increase
since 2002
Gender Inequality
4.1
men
women
Rank:
27 / 32

Hows Life?
New Zealand performs exceptionally well in overall well-being, as shown by the fact that it ranks among the top countries in a large number
of topics in the Better Life Index.
Money, while it cannot buy happiness, is an important means to achieving higher living standards. In New-Zealand, the average person
earns 18 601 USD a year, less than the OECD average of 22 387 USD a year. But there is a considerable gap between the richest and
poorest the top 20% of the population earn five times as much as the bottom 20%.
In terms of employment, 72% of people aged 15 to 64 in New-Zealand have a paid job, above the OECD employment average of 66%.
Some 78% of men are in paid work, compared with 67% of women. People in New-Zealand work 1758 hours a year, slightly more than
most people in the OECD who work 1749 hours. More than 13% of employees work very long hours, higher than the OECD average of 9%,
with 20% of men working very long hours compared with 7% for women.
Having a good education is an important requisite for finding a job. In New-Zealand, 72% of adults aged 25-64 have earned the
equivalent of a high-school degree, close to the OECD average of 74%. This is truer of men than women, as 74% of men have successfully
completed high-school compared with 71% of women. New-Zealand is a top-performing country in terms of the quality of its educational
system. The average student scored 524 in reading literacy, maths and science in the OECDs Programme for International Student
Assessment (PISA). This score is higher than the OECD average of 497, making New-Zealand one of the strongest OECD countries in
students skills. On average in New-Zealand, girls outperformed boys by 15 points, higher than the average OECD gap of 9 points.
In terms of health, life expectancy at birth in New-Zealand is 81 years, one year higher than the OECD average of 80 years. Life
expectancy for women is 83 years, compared with 79 for men. The level of atmospheric PM10 tiny air pollutant particles small enough
to enter and cause damage to the lungs is 12 micrograms per cubic meter, considerably lower than the OECD average of 22 micrograms
per cubic meter. New-Zealand also does well in terms of water quality, as 88% of people say they are satisfied with the quality of their water,
higher than the 85% OECD average.
Concerning the public sphere, there is a strong sense of community and high levels of civic participation in New-Zealand, where 96% of
people believe that they know someone they could rely on in time of need, higher than the OECD average of 91%. Voter turnout, a
measure of public trust in government and of citizens participation in the political process, was 79% during recent elections, higher than
the OECD average of 73%. New Zealand is one of the few OECD countries where voter turnout for the bottom 20% of the population is
higher than that of the top 20%, by 7%. On average in OECD countries, voter turnout for the top 20% is 7% higher than for the bottom 20%.
In general, people in New-Zealand are more satisfied with their lives than the OECD average, with 83% of people saying they have more
positive experiences in an average day (feelings of rest, pride in accomplishment, enjoyment, etc) than negative ones (pain, worry,
sadness, boredom, etc). This figure is higher than the OECD average of 80%.
6
inShare
Topics
Housing
6.1
Income
2.8
Jobs
7.5
Community
9.1
Education
7.8
Environment
8.8
Civic Engagement
7.6
Health
9.2
Life Satisfaction
7.9
Safety
9.2
Work-Life Balance
6.4

OECD in Action

OECD Economic Surveys: New Zealand
New Zealand is a resource-based economy and sees green growth as a natural direction for future development.
Read this report
Find Out More
September 26, 2012
Science and innovation: New Zealand
Read this chapter
February 23, 2012
OECD Yearbook 2012: Making Progress
Read this article
May 2, 2011
Doing Better for Families: New Zealand
Download this report
Archive
New Zealand in Detail
Housing
Key Findings
Living in satisfactory housing conditions is one of the most important aspects of peoples lives. Housing is essential to meet basic needs,
such as shelter, but it is not just a question of four walls and a roof. Housing should offer a place to sleep and rest where people feel safe and
have privacy and personal space; somewhere they can raise a family. All of these elements help make a house a home. And of course there
is the question whether people can afford adequate housing.
Housing costs take up a large share of the household budget and represent the largest single expenditure for many individuals and families,
by the time you add up elements such as rent (or loan repayments for those buying their own home), gas, electricity, water, furniture or
repairs In New Zealand, households on average spend 29% of their net disposable income on keeping a roof over their heads, the
highest level in the OECD, where the average is 22%.
In addition to housing costs it is also important to examine living conditions, such as the average number of rooms shared per person and
whether households have access to basic facilities. In New Zealand, 92% of people say they are satisfied with their current housing
situation, higher than the OECD average of 87%. This high level of subjective satisfaction reflects New Zealands good performance in
objective housing indicators.
The number of rooms in a dwelling, divided by the number of persons living there, indicates whether residents are living in crowded
conditions. Overcrowded housing may have a negative impact on physical and mental health, relations with others and the development of
children. In addition, dense living conditions are often a sign of inadequate water and sewage supply. In New Zealand, the average home
contains 2.3 rooms per person, more than the OECD average of 1.6 rooms per person. In terms of basic facilities, nearly every dwelling
in New Zealand contains private access to an indoor flushing toilet, higher than the OECD average of 97.8%.
More Resources
How's Life?: Housing Conditions
Read this report
Housing and the Economy: Policies for Renovation
Read this report
Indicators
Housing expenditure
29%
Rank:
36 / 36
Trend


-0.5%
average annual increase
since 1995
Dwelling with basic facilities
99.79%
Rank:
11 / 36
Rooms per person
2.3 rooms
Rank:
2 / 36
Income
Key Findings
While money may not buy happiness, it is an important means to achieving higher living standards and thus greater well-being. Higher
economic wealth may also improve access to quality education, healthcare and housing.
Household net-adjusted disposable income is the amount of money that a household earns each year after tax. It represents the money
available to a household for spending on goods or services. In New Zealand, the average household net-adjusted disposable income is 18
601 USD a year, lower than the OECD average of 22 387USD.
Household financial wealth is the total value of a households financial worth. In New Zealand, the average household wealth is lower
than the OECD average of 36 238 USD. While the ideal measure of household wealth should include real assets (e.g. land and dwellings),
such information is currently available for only a small number of OECD countries.
Despite a general increase in living standards across OECD countries over the past fifteen years, not all people have benefited from this to
the same extent. In the New Zealand, the income of the top 20% of the population is 38 025 USD a year, whereas the bottom 20% live
on 7 166 USD a year.
More Resources
How's Life?: Income and Wealth
Read this report
National Accounts at a Glance 2010
Read this report
Indicators
Household financial wealth
24008 USD
Rank:
19 / 36
Household net adjusted disposable income
18601 USD
Rank:
25 / 36
Trend


+1.6%
average annual increase
since 1995
Social Inequality
5.3
rich
poor
Rank:
21 / 35
Jobs
Key Findings
Having a job brings many important benefits, including: providing a source of income, improving social inclusion, fulfilling ones own
aspirations, building self-esteem and developing skills and competencies. In New Zealand, more than 72% of the working-age population
aged 15 to 64 has a paid job. This figure is higher than the OECD employment average of 66%. Employment rates are generally higher for
the better-off in society than the worst-off; in New-Zealand 83% of the top 20% of the population has a paid job, compared with 62% for the
bottom 20%. This 21% difference is lower than the OECD average 35% and suggests the job market in New-Zealand is relatively inclusive.
Women are still less likely than men to participate in the labour market. In New-Zealand, 67% of women have jobs. This is more than the
OECD average of 59% but less than the 78% employment rate of men in New-Zealand. This 11% gender difference is slightly lower
than the OECD average of 13% and suggests New-Zealand could further improve employment opportunities for women but has generally
been successful in addressing the constraints and barriers women face accessing work.
Young people aged 15-24 in New-Zealand, are facing difficulties however, with an unemployment rate of 17.1% compared with the OECD
average of 16.7%.
Unemployed persons are defined as those who are not currently working but are willing to do so and actively searching for work. Long-term
unemployment can have a large negative effect on feelings of well-being and self-worth and result in a loss of skills, further reducing
employability. In New Zealand, the percentage of the labour force that has been unemployed for a year or longer is currently at 0.6%,
much lower than the OECD average of 3.0%. There is little difference on average between men and women in the OECD area when it
comes to long-term unemployment. In New-Zealand, the long-term unemployment rate for men and women is the same with 0.6%.
The wages and other monetary benefits that come with employment are an important aspect of job quality. In New Zealand, people earn 31
878 US dollars per year on average, lower than the OECD average 34 033 US dollars. Not everyone earns that amount however. Whereas
the top 20% of the population earn 59 688 US dollars per year, the bottom 20% live on 16 566 per year.
More Resources
OECD Employment Outlook 2011
Read this report
How's Life?: Jobs and Earnings
Read this report
Indicators
Job security
10.23%
Rank:
24 / 36
Personal earnings
31878 USD
Rank:
22 / 36
Trend


+1.6%
average annual increase
since 2005
Gender Inequality
1.1
men
women
Rank:
6 / 30
Social Inequality
3.6
rich
poor
Rank:
10 / 30
Long-term unemployment rate
0.59%
Rank:
4 / 36
Trend


-6.7%
average annual increase
since 1995
Gender Inequality
1.1
men
women
Rank:
9 / 34
Social Inequality
2.3
rich
poor
Rank:
13 / 32
Employment rate
72%
Rank:
8 / 36
Trend


+0.2%
average annual increase
since 1995
Gender Inequality
1.2
men
women
Rank:
19 / 36
Social Inequality
1.3
rich
poor
Rank:
6 / 33
Community
Key Findings
Humans are social creatures. The frequency of our contact with others and the quality of our personal relationships are thus crucial
determinants of our well-being. Helping others can also make you happier. People who volunteer tend to be more satisfied with their lives
than those who do not. Time spent volunteering also contributes to a healthy civil society. On average, people in New Zealand spend 13
minutes per day in volunteering activities, the highest in the OECD where the average is 4 minutes per day . Nearly64% reported having
helped a stranger in the last month, much higher than the OECD average of 47% .These high scores suggest there is a strong sense of
community in New Zealand.
A strong social network, or community, can provide emotional support during both good and bad times as well as provide access to jobs,
services and other material opportunities. In New Zealand, 95% of people believe that they know someone they could rely on in a time
of need, higher than the OECD average of 91%. There is little difference between men and women, as96% of men believe they have this
kind of social support, compared with 95% of women. The level of social support is similar across society regardless of peoples
education and income in New Zealand, where around 96% of the bottom 20% report having someone to count on for help in times of
need, compared to over 94% for the top 20%. New Zealand is one of four countries where the bottom 20% report stronger social
networks than the top 20%.

More Resources
Hows Life?: Social Connections
Read this report
Society at a Glance: Social Isolation
Read this report
OECD Insights: Human Capital
Download this report
Indicators
Quality of support network
95%
Rank:
6 / 36
Gender Inequality
1.0
men
women
Rank:
6 / 36
Social Inequality
1.0
rich
poor
Rank:
7 / 35
Education
Key Findings
A well-educated and well-trained population is essential for a countrys social and economic well-being. Education plays a key role in
providing individuals with the knowledge, skills and competences needed to participate effectively in society and in the economy. Most
concretely, having a good education greatly improves the likelihood of finding a job and earning enough money. Across OECD countries,
men with university-level degrees are 16% more likely to find jobs, and women are 30% more likely. Lifetime earnings also increase with
each level of education.
Following a decline in manual labour over previous decades, employers now favour a more educated labour force. High-school graduation
rates therefore provide a good indication of whether a country is preparing its students to meet the minimum requirements of the job market.
In New Zealand, 72% of adults aged 25-64 have earned the equivalent of a high-school degree, close to the OECD average of 73%.
However, among younger people a better indicator of New Zealands future 79% of 25-34 year-olds have earned the equivalent of a
high-school degree, also close to the OECD average of 80%.
But graduation rates, while important, speak little to the quality of education received. The OECDs Programme for International Student
Assessment (PISA) reviews the extent to which students have acquired some of the knowledge and skills that are essential for full
participation in modern societies. In 2009, PISA focused on examining students reading ability, as research shows that reading skills are
more reliable predictors of economic and social well-being than the number of years spent in school.
New Zealand is a top-performing OECD country in reading literacy, with the average student scoring 524 out of 600. This score is
higher than the OECD average of 493, making New Zealand the 4th strongest OECD country in reading skills. Additionally, students
performed well in mathematics and science, with more than 17% reaching the two highest levels of proficiency.
More Resources
Education at a Glance 2011: Highlights
Download this report
PISA 2009 Results: What Students Know and Can Do
Read this report
How's Life?: Education and Skills
Read this report
Indicators
Years in education
18.6 years
Rank:
5 / 36
Gender Inequality
1.0
men
women
Rank:
12 / 35
Student skills
524 score
Rank:
5 / 36
Gender Inequality
1.0
men
women
Rank:
26 / 36
Social Inequality
1.3
rich
poor
Rank:
28 / 36
Educational attainment
72%
Rank:
23 / 36
Trend


+1.5%
average annual increase
since 2000
Gender Inequality
1.0
men
women
Rank:
14 / 35
Environment
Key Findings
The quality of our local living environment has a direct impact on our health. Outdoor air pollution is one important environmental issue that
directly affects the quality of peoples lives. Despite national and international interventions and decreases in major pollutant emissions, the
health impacts of urban air pollution continue to worsen with air pollution set to become the top environmental cause of premature
mortality globally by 2050.
Air pollution in urban centres, often caused by transport and the use of small-scale burning of wood or coal, is linked to a range of health
problems, from minor eye irritation to upper respiratory symptoms in the short-term and chronic respiratory diseases such as asthma,
cardiovascular diseases and lung cancer in the long-term. Children and the elderly may be particularly vulnerable.
PM10 tiny particulate matter small enough to be inhaled into the deepest part of the lung is monitored in OECD countries because it can
harm human health and reduce life expectancy. In New Zealand, PM10 levels are 11.9 micrograms per cubic meter, much lower than the
OECD average of 22 micrograms per cubic meter.
Monitoring data in some urban areas show that PM10 concentrations frequently breach the national air quality standards, often as the result
of the use of solid fuels for domestic heating. In 2003, Environment Canterbury launched a NZD 38 million project called Clean Heat to
convert 26 400 Christchurch homes to cleaner forms of heating. As of June 2005, heating systems in 3000 houses had been upgraded, with
assistance levels varying with household income.
Poor indoor air quality is associated with the exacerbation of respiratory conditions and allergic reactions, particularly among older people,
young children and Maori. According to official statistics for 1998, 31% of New Zealand homes used unvented gas heaters burning
bottled gas. The health risks associated with this type of heating fall disproportionately on lower socio-economic groups and older people
who spend most of their time at home.
Access to clean water is fundamental to human well-being. Despite significant progress in OECD countries in reducing water pollution,
improvements in freshwater quality are not always easy to discern. In New Zealand, 88% of people say they are satisfied with water
quality. This score is slightly higher than the OECD average of 85%.
More Resources
Environmental Performance Reviews: New Zealand
Read this report
OECD Environmental Outlook to 2030
Read this report
Indicators
Water quality
88%
Rank:
15 / 36
Gender Inequality
1.0
men
women
Rank:
23 / 36
Social Inequality
1.1
rich
poor
Rank:
31 / 35
Air pollution
12 micrograms
Rank:
2 / 36
Trend


-1.0%
average annual increase
since 1990
Civic Engagement
Key Findings
A cohesive society is one where citizens have a high degree of confidence in their governmental institutions and public administration. In
New-Zealand, 67% of people say they trust their political institutions,higher than the OECD average of 56%. High voter turnout is
another measure of public trust in government and of citizens participation in the political process. In the most recent elections for which
data is available, voter turnout in New Zealand was 79% of those registered. This figure is higher than the OECD average of 73%.
Even if the right to vote is universal in all OECD countries, not everyone exercises this right. While on average there are few differences
between men and women concerning participation in elections, in New Zealand men outvote women by more than 3%. This difference
suggests there is a gap in how men and women perceive the functioning of New Zealands democratic institutions. Income can also have a
strong influence on voter turnout. New Zealand is one of the few OECD countries where voter turnout for the bottom 20% of the
population is higher than that of the top 20%, by 7%. On average in OECD countries, voter turnout for the top 20% is 7% higher than
for the bottom 20%.
Ensuring that government decision making is not compromised by conflicts of interest is key to maintaining trust in government.
Transparency is therefore essential to hold government to account and to maintain confidence in public institutions.
Freedom of information laws (FOI) allow the possibility for individuals to access undisclosed information. For such policies to be successful,
the public should have a clear understanding of their rights under the law, should be able to file requests with ease and should be protected
against any possible retaliation. People in New Zealand can file a request for information either in writing, online, by telephone or in person
thus greatly facilitating the FOI process. However, there are no provisions for anonymity or protection from retaliation.
More Resources
Government at a Glance: New Zealand
Download this report
How's Life?: Civic Engagement & Governance
Read this report
Indicators
Consultation on rule-making
10.3 index
Rank:
8 / 36
Trend


+0.0%
average annual increase
since 2005
Voter turnout
79%
Rank:
15 / 36
Trend


-0.5%
average annual increase
since 1981
Gender Inequality
1.0
men
women
Rank:
19 / 30
Social Inequality
1.1
rich
poor
Rank:
13 / 29
Health
Key Findings
Most OECD countries have enjoyed large gains in life expectancy over the past decades, thanks to improvements in living conditions, public
health interventions and progress in medical care. In 2009,life expectancy at birth in New Zealand stood at 81 years, one year above the
OECD average of 80 years. Life expectancy for women is 83 years, compared with 79 for men.
Higher life expectancy is generally associated with higher healthcare spending per person, although many other factors have an impact on
life expectancy (such as living standards, lifestyles, education and environmental factors). Health spending was estimated at 10.3% of
GDP in New Zealand, higher than the OECD average of 9.7%. New Zealand ranks below the OECD average in terms of health spending
per person, with spending of 2683 USD in 2008, compared with an OECD average of 3060 USD.
Throughout the OECD, tobacco consumption and excessive weight gain remain two important risk factors for many chronic diseases.
Smoking rates among adults in New Zealand have decreased from 30.0% in 1985 to 18.1% in 2007, a rate lower than the OECD average of
23.3%, and sixth lowest among OECD countries. The obesity rate among adults, based on actual measures of height and weight, was
26.5% in 2007. It is lower than in the United States (33.8% in 2008) and Mexico (30.0% in 2006), but higher than the OECD average of
17%.
When asked, How is your health in general?, 90% of people in New Zealand reported to be in good health, much higher than the
OECD average of 70%. Despite the subjective nature of this question, the answers have been found to be a good predictor of peoples future
health care use . Gender, age and social status may affect answer to this question. On average in OECD countries, men are more likely to
report good health than women, with an average of 72% for men and 67% for women. In New Zealand, there is no difference between
men and women with 90% of positive answers. Not surprisingly, older people report poorer health, as do those who are unemployed, or
who have less education or income.
More Resources
OECD Health Data 2010: New Zealand
Download this report
Obesity and the Economics of Prevention
Read this report
How's Life?: Health Status
Read this report
Indicators
Self-reported health
90%
Rank:
2 / 36
Trend


+0.9%
average annual increase
since 2003
Gender Inequality
1.0
men
women
Rank:
2 / 34
Life expectancy
81 years
Rank:
12 / 36
Trend


+0.3%
average annual increase
since 1960
Gender Inequality
1.0
men
women
Rank:
1 / 36
Life Satisfaction
Key Findings
Happiness can be measured in terms of life satisfaction, the presence of positive experiences and feelings, and the absence of negative
experiences and feelings. Such measures, while subjective, are a useful complement to compare the quality of life across countries.
Life satisfaction measures how people evaluate their life as a whole rather than their current feelings. It captures a reflective assessment of
which life circumstances and conditions are important for subjective well-being. When asked to rate their general satisfaction with life on a
scale from 0 to 10, New Zelanders gave it a 7.2 grade, higher than the OECD average of 6.7.
There is little difference in life satisfaction levels between men and women across OECD countries. This is true in New Zealand, where men
gave their life a 7.1 grade and women 7.2. Social status does, however, strongly influence subjective well-being. Whereas the bottom 20%
of the New Zealand population, have a life satisfaction level of 6.7, this score reaches 7.6 for the top 20% .
Happiness, or subjective well-being, is also defined as the presence of positive experiences and feelings, and/or the absence of negative
experiences and feelings. In New Zealand 83% of people reported having more positive experiences in an average day(feelings of rest,
pride in accomplishment, enjoyment, etc) than negative ones (pain, worry, sadness, boredom, etc). This figure is higher than the OECD
average of 80%.


More Resources
Hows Life?: Subjective Well-Being
Read this report
Society at a Glance: Social Indicators
Read this report
Indicators
Life satisfaction
7.2 rate
Rank:
11 / 36
Gender Inequality
1.0
men
women
Rank:
16 / 36
Social Inequality
1.1
rich
poor
Rank:
13 / 35
Safety
Key Findings
Personal security is a core element for the well-being of individuals, and largely reflects the risks of people being physically assaulted or
falling victim to other types of crime. Across the OECD, assault rates have generally declined in the past five years. In New Zealand, 2.2%
of people reported falling victim to assault over the previous 12 months, lower than the OECD average of 4.0%. There is little difference
between men and women in assault rates, at less than 2%.

The homicide rate (the number of murders per 100,000 inhabitants) is a more reliable measure of a countrys safety level because, unlike
other crimes, murders are usually always reported to the police. According to the latest OECD data, New Zealands homicide rate is
1.5, slightly lower than the OECD average of 2.1. In New Zealand, the homicide rate for men is 1.8 compared with 1.2 for women.
Fear of crime is another important indicator as it can constrain behaviour, restrict freedom and threaten the foundation of communities.
Despite a general reduction in assault rates in the past five years, in many OECD countries feelings of security have declined. In New
Zealand, 81% of people feel safe walking alone at night, higher than the OECD average of 67%. While men are at a greater risk of being
victims of assaults and violent crimes, women report lower feelings of security than men . This has been explained by a greater fear of
sexual attacks, the feeling they must also protect their children and their concern that they may be seen as partially responsible .
Social status also has an impact on victimisation rates and perception of security. People with higher income and higher education usually
report higher feelings of security and face lower risks of crime. This can be explained by the fact they can afford better security and are less
exposed to criminal activity such as youth gangs or drug smuggling. In New Zealand, the assault rate for the bottom 20% of the
population is 4.9% higher than for the top 20%.
More Resources
Hows Life?: Personal Security
Read this report
Society at a Glance: Victimisation Rates
Read this report
Indicators
Homicide rate
1.5 homicides
Rank:
22 / 36
Trend


+0.1%
average annual increase
since 2005
Gender Inequality
1.5
men
women
Rank:
10 / 36
Assault rate
2.23%
Rank:
8 / 36
Gender Inequality
2.3
men
women
Rank:
32 / 36
Social Inequality
3.2
rich
poor
Rank:
29 / 35
Work-Life Balance
Key Findings
Finding a suitable balance between work and life is a challenge for all workers, especially working parents. Some couples would like to
have (more) children, but do not see how they could afford to stop working. Other parents are happy with the number of children in their
family, but would like to work more. This is a challenge to governments because if parents cannot achieve their desired work/life balance,
not only is their welfare lowered but so is development in the country.
People spend one-tenth to one-fifth of their time on unpaid work . The distribution of tasks within the family is still influenced by gender
roles: men are more likely to spend more hours in paid work, while women spend longer on unpaid domestic work. . Men in New Zealand,
spend 158 minutes per day cooking, cleaning or caring, higher than the OECD average of 131 minutes but still considerably less than
New Zealand women who spend 294 minutes per day on average on domestic work .
Another important aspect of work-life balance is the amount of time a person spends at work. Evidence suggests that long work hours may
impair personal health, jeopardize safety and increase stress. People in New Zealand work 1 758 hours a year, slightly lower than the
OECD average of 1 749 hours. The share of employees working more than 50 hours per week is not very large across OECD countries.
However, in New Zealand, some 13% of employees work very long hours, higher than the OECD average of 9%. Overall, men spend
more hours in paid work: in New Zealand 20% of men work very long hours, compared with 7% for women.
The more people work, the less time they have to spend on other activities, such as time with others or leisure. The amount and quality of
leisure time is important for peoples overall well-being, and can bring additional physical and mental health benefits. People in New
Zealand devote 65% of their day, or 14.9 hours, to personal care (eating, sleeping, etc.) and leisure (socializing with friends and family,
hobbies, games, computer and television use, etc.) close to the OECD average of 14.8 hours. Fewer hours in paid work for women do not
necessarily result in greater leisure time. In New Zealand, both men and women devote approximately 15 hours per day to personal
care and leisure.
Better Policies for Better Lives
High fertility and female employment rates, but challenges for single parents
New Zealand has experienced a steady growth in the female employment rate, which currently stands at 67%, well above the OECD average
of 57%. Rising female employment has been coupled with rising wages for women too; the gender-wage gap, at 8%, is currently the 3rd
lowest in the OECD, and half the OECD average. The total fertility rate has also increased over the last decade and is now well above the
OECD average of 1.74 children per woman. High fertility and female employment rates in New Zealand, suggest overall compatibility
between work and family life. However, Maori and Pacific ethnic groups combine high fertility rates with much lower female employment
rates.
Although the overall spending per child fell between 2003 and 2007, there has been a welcome increase in early-childhood spending and
childcare provision. The increase in spending on children aged 0-5 years as a share of spending on all children was one of the largest in the
OECD.
Overall, child outcomes in New Zealand are mixed: the child poverty rate, at 12.2%, is around the 12.7% OECD average, infant deaths have
fallen while proportion of low-weight births has also decreased. PISA reading scores are the fourth highest in the OECD. But the proportion
of older children not in education or employment, at 9.3 is higher than the OECD average of 8.0%.
A good package of policies, including flexible workplace practices and affordable early childhood care and education services, helps New
Zealand families to reconcile work and family and female life. Part-time work is a common working practice used by New Zealand mothers
who reduce their working hours when their child is young but return to full-time work when the child starts school.
More Resources
Doing Better for Families: New Zealand
Download this report
How's Life?: Work and Life Balance
Read this report
Babies and Bosses - Key Outcomes of New Zealand
Read this report
Indicators
Time devoted to leisure and personal care
14.87 hours
Rank:
15 / 36
Gender Inequality
1.0
men
women
Rank:
5 / 19
Employees working very long hours
13.28%
Rank:
30 / 36
Trend


-1.2%
average annual increase
since 1995
Gender Inequality
2.9
men
women
Rank:
14 / 32


WEDNESDAY, APRIL 25, 2012
How can education help tackle rising income inequality?
By Ji Eun Chung
Innovation and Measuring Progress Division, Directorate for Education

See instructions below for how to read the chart
The gap between the rich and poor has widened in OECD countries over the past 30 years. As
the latest issue of the OECDs new brief series Education Indicators in Focus describes, the average
income of the richest 10% of people in OECD countries was about nine times greater than the income
of the poorest 10% before the onset of the global economic crisis. This ratio was 5 to 1 in the 1980s.

Whats more, existing income inequality may also limit the income prospects of future generations in
some countries. In countries with higher income inequality such as Italy, the United Kingdom, and
the United States a childs future earnings are likely to be similar to his or her fathers, suggesting
that socio-economic background plays a large role in the development of childrens skills and abilities.
Meanwhile, in countries with lower income inequality like Denmark, Finland, and Norway a childs
future income is not as strongly related to his or her familys income status. In these countries, the
development of childrens skills and abilities has a weaker link with socio-economic factors.

The implications for education policy are clear. Education policies focusing on equity in education may
be a particularly useful way for countries to increase earnings mobility between generations and
reduce income inequality over time. Countries can work towards this goal by giving equal
opportunities to both disadvantaged and advantaged students to achieve strong academic outcomes
laying a pathway for them to continue on to higher levels of education and eventually secure good
jobs.

Four top performers on the 2009 PISA reading assessment show the potential of this approach.
Canada, Finland, Japan, and Korea all have education systems that put a strong focus on equity
and all have yielded promising results. In each of these countries, relatively few students performed at
lower proficiency levels on the PISA reading assessment, and high proportions of students performed
better than would be expected, given their socio-economic background.

Yet while each of these countries focuses on equity, theyve pursued it in different ways. In Japan and
Korea, for example, teachers and principals are often reassigned to different schools, fostering more
equal distribution of the most capable teachers and school leaders. Finnish schools assign specially-
trained teachers to support struggling students who are at risk of dropping out. The teaching
profession is a highly selective occupation in Finland, with highly-skilled, well-trained teachers spread
throughout the country. In Canada, equal or greater educational resources such as supplementary
classes are provided to immigrant students, compared to non-immigrant students. This is believed
to have boosted immigrant students performance.

Income inequality is a challenging issue that demands a wide range of solutions. In a world of growing
inequality, focusing on equity in education may be an effective approach to tackle it over the long run.

For more information
On this topic, visit:
Education Indicators in Focus: www.oecd.org/education/indicators
Equity and Quality in Education - Supporting Disadvantaged Students and Schools
On the OECDs education indicators, visit:
Education at a Glance 2011: OECD Indicators: www.oecd.org/edu/eag2011
Divided we stand: Why inequality keeps rising: www.oecd.org/els/social/inequality
On the OECDs Indicators of Education Systems (INES) programme, visit:
INES Programme overview brochure

Chart source: Source: D'Addio (2012, forthcoming), Social Mobility in OECD countries: Evidence
and Policy Implications; OECD (2008), Growing Unequal?, www.oecd.org/els/social/inequality/GU;
OECD Income distribution database.


How to read the chart: This chart shows the relationship between earnings mobility between generations of a family,
and the prevalence of income inequality in different countries. Overall, countries with higher levels of income inequality
tend to have lower earnings mobility between generations, while countries with lower levels of income inequality tend to
have higher earnings mobility.