HEALTH INEQUALITIES AND INCOME INEQUALITY IN FINLAND

8/6/13   HEALTH INEQUALITIES AND INCOME INEQUALITY IN FINLAND Juha Mikkonen, mikkonen [at] yorku.ca PhD Candidate, York University, Canada Institutio...
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8/6/13  

HEALTH INEQUALITIES AND INCOME INEQUALITY IN FINLAND Juha Mikkonen, mikkonen [at] yorku.ca PhD Candidate, York University, Canada Institutions in Context: Inequality School of Social Sciences and Humanities University of Tampere, Finland, June 3-9, 2013 Organized and Hosted by the North American Studies Program of the University of Tampere 1

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PRESENTATION OUTLINE 1. INCOME INEQUALIT Y AND POVERT Y § Comparative perspective § National perspective 2. HEALTH INEQUALITIES § Level of health inequalities in Finland § Policy documents on health inequalities 3. POLITICS OF POVERT Y REDUCTION § Finnish political parties and poverty reduction § Future prospects

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ADDITIONAL SOURCES   Mikkonen, J. (2012). Finnish experiences. In D. Raphael (Ed.), Tackling health inequalities: Lessons from international experiences (pp. 155-184). Toronto: Canadian Scholars' Press. Available at: http://tinyurl.com/q5yva7g   Mikkonen, J. (2013). The politics of poverty in Finland. Social Alternatives, 32(1), 24-30. Available at: http://tinyurl.com/llj399e   Mikkonen, J. (forthcoming). Coping strategies among marginalized youth in Finland. In A.-L. Matthies & L. Uggerhöj (Eds.), Par ticipation, marginalization and welfare ser vices – concepts, politics and practices across European countries. Ashgate, UK. (November, 2013) 8

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Finnish political parties and poverty reduction Future prospects

Books in Finnish

Isola, A-M., Larivaara, M., & Mikkonen, J. (Eds.) (2007). Arkipäivän kokemuksia köyhyydestä. [Everyday Experiences of Poverty, an anthology]. Foreword by Dr. Ilkka Taipale. Keuruu: Avain. Available at http://www.koyhyyskirjoitukset.org/koyhyyskirja.pdf [349 pages] Mikkonen, J., & Typpö, A. (Eds.) (2009). Rikas runo – sanoja köyhyydestä [Rich/Wealthy Poems; an anthology of poems about poverty]. Foreword by the former Minister of Culture, MD Claes Andersson. Helsinki: Avain. [170 pages] Mikkonen, J. (2012). Syrjäytyä vai selviytyä? Nuorten pienituloisuuden syitä, seurauksia ja arjen selviytymiskeinoja [To cope or to marginalize? The experiences of low-income youth in Finland]. European Anti-Poverty Network Finland. Helsinki: Erweko. Available at: http://www.koyhyyskirjoitukset.org/syrjaytya_vai_selviytya.pdf 9

BACKGROUND: THE NORDIC MODEL  Finland belongs to the group of Nordic countries (Finland, Sweden, Norway, Denmark, and Iceland) §  The same commitment to provide basic security, free education, and social and health services for everyone regardless of income and wealth.

 Finland has been able to attain high levels of economic and social performance despite: §  Relatively high tax rate §  Generous social benefits §  Extensive public services §  Universal policies including tax-funded higher education (incl. Master’s and PhD degrees) 10

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1. INCOME INEQUALIT Y AND POVERT Y  Finnish society has strived to combine social equality with economic competitiveness. § In 2007, Finland was the seventh most equal of 30 most developed OECD countries in terms of income disparities (OECD, 2008).  In terms of economic performance, the World Economic Forum (WEF) ranks Finland as the third most competitive economy in the world (Global Competitiveness Report 2012-2013).

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The Competitiveness Index 2012–2013 rankingsrankings and 2011–2012 compa Table 3:Global The Global Competitiveness Index 2012–2013 (12 different sets of indicators) GCI 2012–2013

Country/Economy

Switzerland Singapore Finland Sweden Netherlands Germany United States United Kingdom Hong Kong SAR Japan Qatar Denmark Taiwan, China Canada Norway Austria Belgium Saudi Arabia Korea, Rep.

Rank/144

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19

Rank among Score GCI 2011–2012 (1–7) sample

5.72 5.67 5.55 5.53 5.50 5.48 5.47 5.45 5.41 5.40 5.38 5.29 5.28 5.27 5.27 5.22 5.21 5.19 5.12

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19

GCI 2011–2012 rank

1 2 4 3 7 6 5 10 11 9 (Schwab,142012) 8 13 12 16 19 15 17 24

Country/Economy

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Ukraine Uruguay Vietnam Seychelles Georgia Romania Botswana Macedonia, FYR Croatia Armenia Guatemala Trinidad and Tobago Cambodia Ecuador Moldova Bosnia and Herzegovina 6   Albania Honduras Lebanon

Ran

7 7 7 7 7 7 7 8 8 8 8 8 8 8 8 8 8 9 9

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INCOME INEQUALIT Y I   One of the central debates during the past few years has been the relation of income inequality to health and well-being (Wilkinson & Pickett, 2006, 2009).   Finland has been a very equal country in terms of income distribution, but, as in many Western developed nations, income inequality has risen in Finland.   Finnish society began to experience deepening socio-economic differences and income inequality after the recession of the 1990s.   During the past few decades, the disposable income of Finnish wage earners has increased, but, at the same time, the level of many minimum social benefits has stagnated (Moisio et al., 2011). 13

Gini coefficients in 2010 (at disposable income, post taxes and transfers) (http://stats.oecd.org/, May 2013) Mexico

0.466

United States

0.38

Israel

0.376

Portugal

0.344

United Kingdom

0.341

Spain

0.338

Greece

0.337

Australia

0.334

Canada

0.32

Italy

0.319

Estonia

0.319

Korea

0.31

Poland

0.305

France

OECD average

0.303

Netherlands

0.288

Germany

0.286

Luxembourg

0.27

Sweden

0.269

Austria

0.267

Belgium

0.262

Slovak Republic

0.261

Finland

0.26

Czech Republic

0.256

Denmark

0.252

Norway

0.249

Slovenia

0.246

Iceland

0.244 0

0.05

0.1

0.15

0.2

0.25

0.3

0.35

0.4

0.45

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0.5

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INCOME INEQUALIT Y II

  In Finland, increases in income have concentrated on the highest income groups as the redistributive effect of taxes and transfers has decreased.   However, income inequality in Finland (.26) is still much lower -./ than in many other OECD countries, which had an average Gini coefficient of .31 in the mid-2000s (http://stats.oecd.org).

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Regardless of these recent changes, income inequality in Finland is still below the average OECD §  Gini coefficient of=.310.316 in the mid-2000s (OECD, 2008, 51). The growth of Finnish OECD-20 income inequality is caused largely by the fact that minimum social and unemployment bene§  OECD-34 = raised 0.314 fits in Finland have not been since the mid-1990s, and benefits have fallen behind the general wage trend (Moisio, 2006; Moisio et al., 2011). Table 6.3 shows average household disposable income by four specific income deciles between 1995 and 2010. The highest-earning decile has experienced a 66 percent increase in income from €54,751 to €91,115, whereas the lowest-earning decile’s increase has been only 12 percent from €9,759 to €10,943 (Statistics Finland, 2011b). Along with income inequality, the level of relative poverty has risen rapidly in Finland. According to Statistics Finland (2009), in 1996 only 8.5 percent of the Finnish population lived below the at-risk-of-poverty line, which is set at 60 percent of median equivalized income (Eurostat,

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Year

1st Income 4th Income 7th Income 10th Income Decile (lowest Decile Decile Decile (highest income) income) 1995 9759 22 007 30 363 54 751 1996 9780 21 937 30 765 55 175 1997 9769 22 481 31 968 60 717 1998 9764 22 667 32 526 64 988 1999 9815 22 991 33 121 72 669 2000 9706 23 132 33 544 78 parliament 123 Figure 5. Finnish political parties currently represented in the and their share 2001 9897 23 600 held on34April 215 17, 2011 73 213 votes in the parliamentary election (Statistics Finland, 2011). 2002 10 072 24 056 34 851 74 312 2003 10 142 24 462 35 653 77 082 2004 10 267 25 301 37 069 83 709 2005 10 310 25 626 37 629 83 962 2006 10 371 26 116 38 539 87 514 2007 10 494 26 921 39 722 94 087 2008 10 663 27 118 40 022 89 564 2009 10 798 27 691 40 480 86 815 2010 10 943 27 822 41 011 91 115 Source: Statistics Finland (2011b), Income distribution statistics, PX-Web databases, retrieved from: http:// tilastokeskus.fi/tup/tilastotietokannat/index_en.html.

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THE CONCEPT OF RELATIVE DEPRIVATION   The classic definition of relative deprivation has been given by renowned British sociologist Peter Townsend (Townsend, 1993):

"People are relatively deprived if they cannot obtain, at all or sufficiently, the conditions of life - that is, the diets, amenities, standards and services - which allow them to play the roles, participate in the relationships and follow the customary behaviour which is expected of them by virtue of their membership of society. -If they lack or are denied resources to obtain access to these conditions of life and so fulfill membership of society they may be said to be in poverty.” (Townsend, 1993, p. 36)

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RELATIVE POVERT Y I  T he eradication of absolute poverty has been one of the most important achievements of well-developed welfare states.  In Europe, poverty is measured with relative indicators. § Relative poverty vs. absolute poverty

 According to the Statistical Office of the European Communities (Eurostat), people whose incomes fall 60% below the median income are defined to be at risk of poverty. 18

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RELATIVE POVERT Y II

 Nordic policy measures have not been aimed specifically at poverty reduction but to provide protection to the citizens against social risks (e.g. sickness, unemployment) that can lead to poverty.  The relative poverty rates in the Nordic countries are among the lowest in cross-national comparisons (UNICEF 2012; OECD 2011b).  Poverty rates in Finland are relatively low, but have increased since the recession of the 1990s (OECD, 2008). 19

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Poverty rates after taxes and transfers in selected OECD countries (Incomes below 60% of the current median income)

Poverty rate (%)

20

15

10

Figure 5. Finnish political parties currently represented in the parliament and their share of votes in the parliamentary election held on April 17, 2011 (Statistics Finland, 2011). 5

0 Mid-80s Mid-90s Mid-2000s Late-2000s

Norway

France

Germany

Finland

Sweden

12.2 13.4 12.4 13.3

13.3 14.1 13.1 13.5

12 12.7 14.7 14.8

10.7 9.1 13.4 15.6

7.3 7.9 11.4 16.4

OECD - United Canada Average Kingdom 16.1 16.6 17.5 17.8

17.4 19.3 17.9 18.4

18.2 17.1 18.8 19.4

Australia

United States

0 20.8 20.9 21.7

23.8 23.8 23.8 24.4 20

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50 45 40 35 30 25 20

Figure 5. Finnish political parties currently represented in the parliament and their share of votes 15 in the parliamentary election held on April 17, 2011 (Statistics Finland, 2011). 10 5 0 Percentage

Unemployed

Students

45.8

30.1

Others w/o Pensioners employment 26

15.2

Under 16 years old

Selfemployed

Wageearners

12.5

12.4

3.3

Percentage of Finnish Citizens At-Risk-of-Poverty in Various Socioeconomic Groups in 2010 Source: Statistics Finland. 2012c Pienituloisuus henkilön sosioekonomisen aseman mukaan [Low Income Rate by a Person's Socioeconomic Position. 22 Income Distribution Statistics in 2010], Statistics Finland, Helsinki J

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2. HEALTH INEQUALITIES

 What are health inequalities? § Systematic differences in health status between socioeconomic groups (income, education, and occupation) § Socioeconomic gradient  The current Finnish policy: Remedying health disadvantage and reducing health gradients. 23

HEALTH IS NOT ONLY HEALTH CARE The primar y factors that shape the health are not medical treatments or lifestyle choices but rather the living conditions people experience. > The social determinants of health. §  WHO. (2008). Closing the gap in a generation: Health equity through action on the social determinants of health. Commission on Social Determinants of Health. Final report. Geneva: World Health Organization. http://www.who.int/social_determinants/en/ §  Mikkonen, J., & Raphael, D. (2010). Social determinants of health: The Canadian facts. Toronto: York University School of Health Policy and Management. http://thecanadianfacts.org/ 24

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14 SOCIAL DETERMINANTS OF HEALTH   Improving the population health requires we think about health and its determinants in a more sophisticated manner than has been the case to date.

1 . Income and Income Distribution 2. Education 3. Unemployment and Job Security 4. Employment and Working Conditions 5. Early Childhood Development 6. Food Insecurity 7. Housing 8. Social Exclusion 9. Social Safety Network 10. Health Ser vices 11 . Aboriginal Status 12. Gender 13. Race 14. Disability

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HEALTH INEQUALITIES: MORTALIT Y   The overall population health has improved but inequalities in mortality between socio-economic groups in the highest and the lowest income quintiles have increased in Finland.   The difference in mortality rates of Finnish men as high as 12.5 years between the highest and the lowest income deciles in 2007 (Tarkiainen, Martikainen, Laaksonen & Valkonen, 2011).   The researchers have interpreted these findings to reflect the increased life expectancy among the men in the highest income quintile as well as increased social exclusion and alcohol use among the men in the lowest income quintiles.   The role of increased income inequality? 26

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