What is Social Inequality in Central and Eastern Europe? Stephen Whitefield and Matthew Loveless EUREQUAL: Paper presented at CEELBAS Conference Session, ‘Emerging dimensions of social inequality in Russia and Eastern Europe’, St Antony’s College, Oxford, December 13, 2008 Work in Progress – Please DO NOT CITE

What is ‘social inequality’? A vague concept compared with work on … A vague concept compared with work on … Income inequality (Milanovic, 1998; Atkinson, 1999)Income inequality (Milanovic, 1998; Atkinson, 1999) Inequality of wealth (Cagetti and De Nardi, 2008)Inequality of wealth (Cagetti and De Nardi, 2008) Labour market segmentation, e.g. by gender, ethnicity (Schrover et al, 2007)Labour market segmentation, e.g. by gender, ethnicity (Schrover et al, 2007) Welfare status (Layte and Whelan, 2003)Welfare status (Layte and Whelan, 2003) Skills and training (Brown et al, 2008)Skills and training (Brown et al, 2008) Health inequality (Marmot and Wilkinson, 1999)Health inequality (Marmot and Wilkinson, 1999) Housing inequality (Morris and Winn, 1990)Housing inequality (Morris and Winn, 1990) Social inequality as a package of inequalities Social inequality as a package of inequalities

The ‘CEELBAS’ working definition “Social inequality refers to the ways in which socially-defined categories of persons (according to characteristics such as gender, age, ‘class’ and ethnicity) are differentially positioned with regard to access to a variety of social ‘goods’, such as the labour market and other sources of income, the education and healthcare systems, and forms of political representation and participation. These and other forms of social inequality are shaped by a range of structural factors, such as geographical location or citizenship status, and are often underpinned by cultural discourses and identities defining, for example, whether the poor are ‘deserving’ or ‘undeserving’.” “Social inequality refers to the ways in which socially-defined categories of persons (according to characteristics such as gender, age, ‘class’ and ethnicity) are differentially positioned with regard to access to a variety of social ‘goods’, such as the labour market and other sources of income, the education and healthcare systems, and forms of political representation and participation. These and other forms of social inequality are shaped by a range of structural factors, such as geographical location or citizenship status, and are often underpinned by cultural discourses and identities defining, for example, whether the poor are ‘deserving’ or ‘undeserving’.”

A Eurequal working definition of social inequality… … the structure of advantage and disadvantage in the life chances and life outcomes of individuals and families (health, happiness, income, wealth, social and cultural opportunities, etc) that are significantly shaped by citizens’ social and economic locations and identities (labour market situation, social class, education, gender, ethnicity, age, citizenship, etc), by other important distributional mechanisms (social networks -corruption, blat’; government institutions and policies), and by national characteristics (economic and political development). … the structure of advantage and disadvantage in the life chances and life outcomes of individuals and families (health, happiness, income, wealth, social and cultural opportunities, etc) that are significantly shaped by citizens’ social and economic locations and identities (labour market situation, social class, education, gender, ethnicity, age, citizenship, etc), by other important distributional mechanisms (social networks -corruption, blat’; government institutions and policies), and by national characteristics (economic and political development).

The problem of packages in Central and Eastern Europe Some research points to the fragmenting impact of Communist power and command economies on the packaging of advantages and disadvantages Some research points to the fragmenting impact of Communist power and command economies on the packaging of advantages and disadvantages Housing (Szelenyi, 1987)Housing (Szelenyi, 1987) Class fragmentation (Kende and Strmiska, 1987)Class fragmentation (Kende and Strmiska, 1987) Communist-era political economy (Bunce, 1985; Sabel and Stark, 1982)Communist-era political economy (Bunce, 1985; Sabel and Stark, 1982) The transitional character of markets and democracy may also limit the emergence of ‘packages’ that one might expect in established market democracies (Kitschelt, 1992) The transitional character of markets and democracy may also limit the emergence of ‘packages’ that one might expect in established market democracies (Kitschelt, 1992) The differential character of market and democratic development in the region might lead us to expect differences in the form and extent of packaging The differential character of market and democratic development in the region might lead us to expect differences in the form and extent of packaging

Issues arising Is there a social inequality package? How do packages vary across countries? Is there a social inequality package? How do packages vary across countries? Does our measure of social inequality packages correlate in appropriate ways with some other predicted outcomes of social advantage and disadvantage? Does our measure of social inequality packages correlate in appropriate ways with some other predicted outcomes of social advantage and disadvantage? What kinds of people do well or badly in terms of the package of social inequality? How do the determinants of social advantage vary across countries? What kinds of people do well or badly in terms of the package of social inequality? How do the determinants of social advantage vary across countries? What kinds of countries are more or less socially advantaged? What kinds of countries are more or less socially advantaged? How unequal are countries in terms of the distribution of advantages and disadvantages? And what kinds of countries are more unequal than others? How unequal are countries in terms of the distribution of advantages and disadvantages? And what kinds of countries are more unequal than others?

The Eurequal surveys Conducted in 13 countries in Spring, 2007 Conducted in 13 countries in Spring, 2007 Belarus, Bulgaria, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Moldova, Poland, Romania, Russia, Slovakia, UkraineBelarus, Bulgaria, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Moldova, Poland, Romania, Russia, Slovakia, Ukraine National probability samples of between 1000 and 2000 respondents National probability samples of between 1000 and 2000 respondents

The packaging of social advantage and disadvantage To what extent do the following ‘arenas’ in which goods may be differentially distributed correlate with one another? As one package, none, or many? To what extent do the following ‘arenas’ in which goods may be differentially distributed correlate with one another? As one package, none, or many? IncomeIncome PossessionsPossessions SavingsSavings Employment benefitsEmployment benefits Housing situationHousing situation HealthHealth Health accessHealth access Educational accessEducational access Cultural accessCultural access

Table 1. FactorLoadings Income3SavingsAccess:HealthAccess:EducationAccess:CultureHealth House Situ. BenefitsStuffEigenvalue(difference)N Aggregate (2.68)8419 Belarus (2.26)669 Bulgaria (2.45)433 Czech Rep (2.30)587 Estonia (2.19) 604 Hungary (1.95)479 Latvia (2.74)660 Lithuania (3.09)561 Moldova (2.14)566 Poland n/a (1.72)978 Romania (2.77)969 Russia (2.41)1190 Slovakia (1.74)649 Ukraine (2.67)1052

Figure 1. Percentage contribution of each factor loading to factor as a whole (pooled and by country)

What does the package of advantage and disadvantage predict in terms of other aspects household economic circumstances? External validation exercise for our factor External validation exercise for our factor If our factor picks up differences in the distribution of advantage and disadvantages, then it should clearly be associated with a range of other important household economic circumstances If our factor picks up differences in the distribution of advantage and disadvantages, then it should clearly be associated with a range of other important household economic circumstances Material deprivationMaterial deprivation Perceptions of changes in living standardsPerceptions of changes in living standards Ability to buy medicine or pay utility billsAbility to buy medicine or pay utility bills

Table 2. Regression of assessments of social inequality factor on to aspects of household economic circumstances b (se)Material deprivation OLS Compariso n of Living Standards OLS Enough money to buy medicine Logit Enough money to pay utility bills Logit Social inequality factor 0.63*** (0.01) 1.01*** (0.01) 1.52*** (0.04) 1.29*** (0.04) Constant2.86*** (0.01) 3.33*** (0.01) 1.60*** (0.03) 2.07 (0.04) R2R N * p<0.05, ** p<0.01, *** p<0.001

What kinds of countries are advantaged or disadvantages? Differences across the region Differences across the region Russia and Ukraine are most disadvantaged on average, while Czech Republic, Estonia, Hungary and Slovakia are most advantagedRussia and Ukraine are most disadvantaged on average, while Czech Republic, Estonia, Hungary and Slovakia are most advantaged Differences in economic and political development Differences in economic and political development Growing countries have on average more advantagesGrowing countries have on average more advantages Politically freer countries are also more advantagedPolitically freer countries are also more advantaged Differences by levels of inequality Differences by levels of inequality More unequal countries (by comparison of gini’s) are also disadvantagedMore unequal countries (by comparison of gini’s) are also disadvantaged

Conclusions There is a package – one package of social advantage and disadvantage There is a package – one package of social advantage and disadvantage The package is strongly predictive of important household economic outcomes and perceptions The package is strongly predictive of important household economic outcomes and perceptions The ‘usual suspects’ do well and badly and differences across countries appear relatively weak in terms of the social determinants of advantage and disadvantage The ‘usual suspects’ do well and badly and differences across countries appear relatively weak in terms of the social determinants of advantage and disadvantage Countries that are more democratic, grow economically and are more egalitarian have populations that are on average more advantaged than countries that are not Countries that are more democratic, grow economically and are more egalitarian have populations that are on average more advantaged than countries that are not In other words … Central and Eastern Europe does not appear to present differently than states elsewhere … In other words … Central and Eastern Europe does not appear to present differently than states elsewhere … … although until we can do the same analysis elsewhere we can’t be sure. … although until we can do the same analysis elsewhere we can’t be sure. Still, the analysis of social inequality has a promising future. Still, the analysis of social inequality has a promising future.