Finland: Growing Inequality With Contested Consequences

Abstract

From about the lowest in the world, Finnish market income inequality increased from the mid-1970s to the mid-1990s. Welfare policies kept disposable income inequality unchanged, but after the early-1990s recession this increased dramatically, mainly because capital income grew and income redistribution fell. “Social ills” have not massively increased as a result. In fact, deprivation and subjective feelings of scarcity have decreased and the majority are satisfied with their lives. One explanation might be that the discrepancy of increasing relative and decreasing absolute (anchored) poverty diminished. The relative at-risk-of-poverty gap is among the lowest in Europe. A large number of people are concentrated around the median, and relatively small changes in median income may generate large flows of people falling into or moving out of poverty. ‘Social ills’ are visible in the margins of society though, as, for example, average life expectancy increased but remained unchanged in the lowest income quintile.

Authors

Jenni Blomgren, Heikki Hiilamo, Olli Kangas, Mikko Niemelä

Additional Information

• Open Access: no.
• Cite as: Blomgren, J., Hiilamo, H., Kangas, O., & Niemelä, M. (2014). Finland: Growing Inequality with Contested Consequences. In B. Nolan, W. Salverda, D. Checchi, I. Marx, A. McKnight, IG Tóth, & H. van de Werfhorst (Eds.). Changing Inequalities and Societal Impacts in Rich Countries: Thirty Countries' Experiences (Pp. 222–247). Oxford University Press. https://doi.org/10.1093/acprof:oso/9780199687428.003.0010