2.4. Socio-economic trends and inequalities

 

Europe continues to become wealthier. However, inequalities persist, not only between European countries, but also within the country’s towns and cities (especially less developed regions and neighbourhoods), between social groups and also between Europe and neighbouring countries.

 

As highlighted in the Joint Report on Social Protection and Social Inclusion (European Commission, 2008), social and economic policies can and should be mutually supportive. In recent years, social protection reforms and active inclusion policies have contributed to higher growth and more jobs. Still, more needs to be done to ensure that the benefits of an improved economic framework reach those at the margins of society and enhance social cohesion. Preventing and tackling poverty and social exclusion, as well as modernising social protection, combining both social adequacy and economic sustainability in a framework of sound fiscal policies, is therefore fundamental to Europe’s sustainable development. Policy consistency and coordination, including mainstreaming gender equality and solidarity between generations are essential to achieve the objective of fully including the most vulnerable in society. Sustained efforts will be required during, and beyond, the next cycle of the Lisbon strategy.

 

Good indicators of the wealth differences existing between countries are the per capita Gross National Income and the per capita Gross Domestic Product. The data reported in Figure 2.2 clearly show that large differences existing among  EU Member States in terms of gross national income and gross domestic product per capita and, particularly, between the groups of the 15 countries already members of the EU before 2004 and of those who joined the EU in 2004.

 

Figure 2.2. Gross Domestic Product and Gross National Income per capita in EUGLOREH Countries, 2007.

 

GDP is defined as the produced value of all goods and services less the value of any goods or services used in their creation. The calculation of the annual growth rate of GDP per capita at constant prices allows comparisons of the dynamics of economic development both over time and between economies of different sizes. The growth rate is calculated from figures at constant prices since these give volume movements only, i.e. price movements will not inflate the growth rate. Table 2.1 provides an overview of the growth rate of real GDP over the last 10 years of all the EU member States and allows a comparison of the dynamics of economy in these countries.

 

Europe has become wealthier overall as it is shown by the fact that a steady economic growth has been experienced in the last 10 years. However, recent EUROSTAT estimates1 indicate that GDP in the Euro Area and in EU27 declined in the third and forth quarter of 2008 (with respect to their respective previous quarters) and current forecasts are rapidly varying downward.

 

Table 2.1. Growth rate of real gross domestic product in EUGLOREH countries.

 

Inequalities persist, not only between European countries, but also within the country’s towns and cities (especially less developed regions and neighbourhoods), between social groups and also between Europe and neighbouring countries. Regions of relative wealth coexist with those less economically developed (Eurostat, 2005). Even broader gaps can be found inside the biggest European cities. Some 15% of European Union citizens are regarded as being poor. Relative poverty rates in the EU25 range from 8% in the Nordic countries, the Czech Republic and Slovenia to 21% in Greece, Ireland and Slovakia. There seems to have been some convergence in the extent of poverty across the EU15 since the mid 1990s, though no overall reduction can be observed (APPLICA, 2005; Table 2.2).

 

Table 2.2. At risk of poverty rate in EU27 and Croatia.

 

Out of the 78 million Europeans living at risk of poverty, 19 million are children. Ensuring equal opportunities for all through well-designed social policies, and strengthening efforts aimed at successful educational outcomes for each child, is necessary to break the transmission of poverty and exclusion to the next generation. Here, inclusion and anti-discrimination policies need to be reinforced, not least in relation to immigrants and their descendants and to ethnic minorities (Joint Report on Social Protection and Social Inclusion, 2008). When children are poor, it is because they live in jobless or low work-intensity households or because their parent’s jobs do not pay sufficiently and income support is inadequate to ward off the risk of poverty. Therefore, the implementation of balanced, comprehensive active inclusion strategies is an indirect but major element in promoting well-being of children and young people. This involves a combination of quality job opportunities, allowing parents to integrate and progress in the labour market, adequate and well-designed income support and the provision of necessary services for children and their families. The appropriate balance must be struck between helping families and targeting children in their own right. The best performers target the most disadvantaged children within a broader universal approach. Efforts to tackle poverty – of children and overall - will gain leverage from an evidence-based diagnosis of the main causes of poverty and exclusion in each Member States. within this context, national quantified objectives can be instrumental in making a decisive impact on the eradication of poverty. This can be further strengthened by the regular monitoring of policies’ impact and effectiveness and, where needed, by a reinforcement of the statistical capacity.

 

High risk populations in Europe, indicated by low level of education, occupational class, income level, or other groups such as migrants, differ in incidence and prevalence rates, treatment and cure rates, and access to health services (Report prepared by APPLICA, 2005; Semenza and Giesecke, American Journal of Public Health).

 

An independent comprehensive expert Report on “Health inequalities “, commissioned by, and published under the auspices of the UK presidency of the EU in October 2005, and other documents clearly indicate that:

 

·          in all countries with available data, rates of premature mortality are higher among those with lower levels of education, occupational class, or income;

·          inequalities in mortality exist from the youngest to the oldest ages and in both genders, but tend to be smaller among women than among men; and

·          inequalities in mortality can also be found for many specific causes of death, including cardiovascular disease, many cancers, and injury.

 

These inequalities in mortality lead to substantial inequalities in life expectancy at birth (4 to 6 years among men, 2 to 4 years among women). In many Western European countries, mortality differences between socio-economic groups widened during the last three decades of the 20th century. This continued into the 1990s, and has led to considerable increases of the relative excess risk of dying in the lowest socio-economic groups.

 

The explanation of this disturbing phenomenon is only partly known. One aspect which should certainly be taken into account, however, is that this widening of the relative gap in death rates is generally the result of a difference between socio-economic groups in the speed of mortality decline. While mortality declined in all socio-economic groups, the decline has been proportionally faster in the higher socio-economic groups than in the lower. The faster mortality declines in higher socio-economic groups were in their turn mostly due to faster mortality declines for cardiovascular diseases. In many Western European countries, the 1980s and 1990s were decades with substantial improvements in cardiovascular disease mortality. This was due to improvements in health-conducive behaviours (e.g. less smoking, modest improvements in diet and more physical exercise), and to the introduction of effective healthcare interventions (e.g. hypertension detection and treatment, surgical interventions and thrombolytic therapy). Apparently, while these improvements were to some extent taken up by all socio-economic groups, the higher socio-economic groups tended to benefit more from them.

 

The available evidence suggests that during - the late 1980s, inequalities in mortality were in Eastern Europe at least as big, and perhaps even bigger than in Western Europe. For example, a study looking at differences in mortality by level of education in Finland, Norway, Italy, Hungary, the Czech Republic and Estonia in the late 1980s showed substantial inequalities in mortality in all countries, both among men and women. Among men, the excess mortality ranged between 50 and 78 per cent in the three Eastern European countries, as compared to between 25 and 41 per cent in the three Western European countries. Among women, however, relative inequalities in mortality were of similar magnitude in the Eastern compared to the Western countries. Since the political transition, mortality rates have changed dramatically in many countries in Eastern Europe, sometimes for the better (e.g. in the Czech Republic) but often for the worse (e.g. in Hungary and Estonia), particularly among men. This is probably due to a combination of (interlinked) factors: a rise in economic insecurity and poverty; a breakdown of protective social, public health and healthcare institutions; and a rise in excessive drinking and other risk factors for premature mortality. The available evidence clearly shows that these changes in mortality have not been equally shared between socio-economic groups: in the countries with available data, mortality rates have generally improved less, or deteriorated more, in the lower socio-economic groups. Apparently, people with higher levels of education have been able to protect themselves better against increased health risks, and/or have been able to benefit more from new opportunities for health gains. An example is provided by Estonia where a considerable rise of inequalities in mortality has occurred. Evidence from some other Eastern European countries suggests a similar widening of the gap in death rates. The fact that this is not seen in some other countries (e.g. the Czech Republic), however, suggests that a widening of the health gap in a period of important political and economic change is not inevitable.

 

As in the case with mortality, rates of morbidity are usually higher among those with a lower educational level, occupational class or income level:

·          substantial inequalities are also found in the prevalence of most specific diseases (including mental illness) and most specific forms of disability;

·          over the past decades, inequalities in morbidity by socio-economic position have been rather stable; and

·          together with inequalities in mortality, inequalities in morbidity contribute to large inequalities in 'healthy life expectancy' (number of years lived in good health).

Inequalities are also evident in the prevalence of self-reported chronic conditions by level of education among people aged 25-79 during the ’90s. Data indicate that most chronic diseases have a higher prevalence in the lower educational groups.

 

Moreover, the European Commission also released the Communication on “Unequal Welfare States, Distributive Consequences of Population Ageing in Six European Countries”. DG Employment and Social Affairs, 2004. As retired people generally have lower incomes than employed workers, ageing will lead to a slight rise in income inequality in Europe in the next 20 years. Larger numbers of people with lower incomes will in turn lead to higher poverty rates.

 

While healthcare systems have contributed to significant improvements in health across the EU, access to healthcare remains uneven across social groups. A major challenge is allowing access for all to high quality care reflecting recent technological progress while ensuring sustainability. Hence, Member States are implementing policies to reduce these inequalities, e.g. by: addressing risk factors through health promotion; reducing the prevalence and incidence of certain diseases; and ensuring more effective prevention activities in various settings (at home, school, work). Also important are the steps to increase population coverage, address financial barriers to care, emphasize promotion and prevention activities over curative care, and address cultural barriers to the use of services. The Structural funds will be used to support reform and capacity building mainly to improve access and develop human resources. A combination of general policies and those tailored to lower socio-economic groups is needed. Virtually, all Member States have implemented universal or almost universal rights to care and have adapted services to reach those who have difficulty in accessing conventional services due to physical or mental disability or to linguistic or cultural differences. Few have begun to address health inequalities systematically and comprehensively by reducing social differences, preventing the ensuing health differences, or addressing the poor health that results. This would ensure in practice equal access for equal needs. Finally, policies outside the health sector are also central to improving the health of the population and reducing the existing gaps in healthcare provision (Joint Report on Social Protection and Social Inclusion, 2008).