8/6/13 1 HEALTH INEQUALITIES AND INCOME INEQUALITY IN FINLAND 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 Juha Mikkonen, mikkonen [at] yorku.ca PhD Candidate, York University, Canada 2
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HEALTH INEQUALITIES AND INCOME INEQUALITY
IN FINLAND
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
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Juha Mikkonen, mikkonen [at] yorku.ca PhD Candidate, York University, Canada
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1. INCOME INEQUALITY AND POVERTY § Comparative perspective § National perspective
2. HEALTH INEQUALITIES
§ Level of health inequalities in Finland § Policy documents on health inequalities
3. POLITICS OF POVERTY REDUCTION § Finnish political parties and poverty reduction § Future prospects
PRESENTATION OUTLINE
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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.), Participation, marginalization and welfare services – concepts, politics and practices across European countries. Ashgate, UK. (November, 2013)
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ADDITIONAL SOURCES
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Finnish political parties and poverty reduction Future prospects
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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
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)
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BACKGROUND: THE NORDIC MODEL
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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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1. INCOME INEQUALITY AND POVERTY
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The Global Competitiveness Report 2012–2013 | 13
1.1: The Global Competitiveness Index 2012–2013
Table 3: The Global Competitiveness Index 2012–2013 rankings and 2011–2012 comparisons
The Global Competitiveness Index 2012–2013 rankings (12 different sets of indicators)
(Schwab, 2012)
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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
INCOME INEQUALITY I
14 0.244
0.246
0.249
0.252
0.256
0.26
0.261
0.262
0.267
0.269
0.27
0.286
0.288
0.303
0.305
0.31
0.319
0.319
0.32
0.334
0.337
0.338
0.341
0.344
0.376
0.38
0.466
0 0.05 0.1 0.15 0.2 0.25 0.3 0.35 0.4 0.45 0.5
Iceland
Slovenia
Norway
Denmark
Czech Republic
Finland
Slovak Republic
Belgium
Austria
Sweden
Luxembourg
Germany
Netherlands
France
Poland
Korea
Estonia
Italy
Canada
Australia
Greece
Spain
United Kingdom
Portugal
Israel
United States
Mexico
Gini coefficients in 2010 (at disposable income, post taxes and transfers) (http://stats.oecd.org/, May 2013)
OECD average
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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).
§ OECD-20 = 0.316 § OECD-34 = 0.314
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INCOME INEQUALITY II
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).
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!"##"$%&'()*+"*#,*$& -./
Regardless of these recent changes, income inequality in Finland is still below the average OECD Gini coe! cient of .31 in the mid-2000s (OECD, 2008, 51). " e growth of Finnish income inequality is caused largely by the fact that minimum social and unemployment bene-# ts in Finland have not been raised since the mid-1990s, and bene# ts have fallen behind the general wage trend (Moisio, 2006; Moisio et al., 2011). Table 6.3 shows average household dis-posable income by four speci# c income deciles between 1995 and 2010. " e 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. Accord-ing 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,
Source: Statistics Finland (2011b), Income distribution statistics, PX-Web databases, retrieved from: http://tilastokeskus.# /tup/tilastotietokannat/index_en.html.
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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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THE CONCEPT OF RELATIVE DEPRIVATION
The 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.
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RELATIVE POVERTY I
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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).
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RELATIVE POVERTY II
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).
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Norway France Germany Finland Sweden OECD - Average
Poverty rates after taxes and transfers in selected OECD countries (Incomes below 60% of the current median income)
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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).
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).
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Unemployed Students Others w/o
employment Pensioners
Under 16 years old
Self-employed
Wage-earners
Percentage 45.8 30.1 26 15.2 12.5 12.4 3.3
0
5
10
15
20
25
30
35
40
45
50
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. Income Distribution Statistics in 2010], Statistics Finland, Helsinki<http://www.tilastokeskus.fi/til/tjt/2010/02/ tjt_2010_02_2012-01-25_kat_004_fi.html>
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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.
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2. HEALTH INEQUALITIES
The primary 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/
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HEALTH IS NOT ONLY HEALTH CARE
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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 Services 11. Aboriginal Status 12. Gender 13. Race 14. Disability
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14 SOCIAL DETERMINANTS OF HEALTH
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
HEALTH INEQUALITIES: MORTALITY
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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).
lack of comparable statistical data does not allow these results to be put in an international per-spective. ! e researchers have interpreted these " ndings to re# ect 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 (Tarkiainen et al., 2011).
N&2?1H'O3&P$2?"1"&L'2L'623",&L1&7'"3'65%="7"14Relative socio-economic health di$ erences can be observed in many chronic illnesses, including the prevalence of coronary heart disease, type 2 diabetes, and musculoskeletal disorders (Palosuo et al., 2009). ! e general pattern is that the overall morbidity is higher in lower socio-economic
Source: Valkonen, T., Ahonen, H., Martikainen, P., & Remes, H. (2009). Socio-economic differences in mor- tality. In H. Palosuo, S. Koskinen, E. Lahelma, E. Kostiainen, R. Prättälä, T. Martelin, A. Ostamo, I. Keskimäki, M. Sihto, E. Linnanmäki & K. Talala (Eds.), Health inequalities in Finland: Trends in socioeconomic health differences 1980–2005 (pp. 40–60). Helsinki: Ministry of Social Affairs and Health Publications.
The general pattern is that the overall morbidity is higher in lower socio-economic groups.
Relative socio-economic health differences can be observed in many chronic illnesses, including the prevalence of coronary heart disease, type 2 diabetes, and musculoskeletal disorders (Palosuo et al., 2009)
The lowest socio-economic groups are 50 percent more
likely than the highest socio-economic groups to experience long-term illnesses (Palosuo et al., 2009).
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HEALTH INEQUALITIES: MORBIDITY I
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Finnish men and women in the lower education groups reported poorer self-rated health than in the higher education groups.
A similar pattern was also present when health dif ferences were observed by labour market status, and the unemployed consistently reported their health as lower than the employed population.
The percentage of people who felt that their health is below the average was 40–50 percent in the lowest education group as compared to 20–30 percent in the highest education group (Rahkonen et al., 2009).
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HEALTH INEQUALITIES: MORBIDITY II
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Margaret Whitehead's Action Spectrum: Various degrees of commitment to reduce social inequalities in health (Whitehead, 1998).
The U.S.?
The UK?
Nordic countries?
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Finnish governments have produced numerous policy papers and strategies that emphasize tackling inequalities in health during the past decades.
These strategies have had a clear objective of reducing health inequalities (Ministry of Social Affairs and Health, 1987, 1993, 2001, 2008, 2009, 2011).
Although the overall health of Finnish population has improved, relative health inequalities between socio-economic groups have increased despite the policy goals set in public health programs. § This may indicate a divergence between strategic policy objectives
and the actual implementation of those policies. 31
POLICY STRATEGIES
Health for All Program (1986/1993) Health 2015 Public Health Program (2001) National Action Plan to Reduce Health Inequalities,
2008–2011 Program for Health Promotion, 2007–2011 Finnish Government Programmes, 2007–2011 & 2011–
2015 Socially Sustainable Finland, 2020
See the research report: Health Inequalities in Finland: Trends in Socioeconomic Health Differences 1980–2005 (Palosuo et al., 2009).
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EXAMPLES OF POLICY PAPERS
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§ Finnish political parties and poverty reduction
§ Future prospects
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3. THE POLITICS OF POVERTY REDUCTION
The prevalence of poverty is associated to public policy decisions that influence the distribution of resources within a society.
These public policy decisions are shaped by different political ideologies and discourses that are maintaining or reshaping social and economic structures.
Political parties have the key role in poverty
reduction through the policies they support and are willing to implement.
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POVERTY AND PUBLIC POLICY
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The parties were asked to name at least three key actions that would reduce poverty in Finland.
The analysis includes responses from seven different
political parties that are currently represented in the Finnish parliament.
The responses were collected in the context of the
European Union’s theme year against poverty and social exclusion in 2010 (before the 2011 parliamentary election that was held on April 17 in 2011).
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REVIEW POLICY INITIATIVES OF FINNISH POLITICAL PARTIES
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).
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!
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).
-> The current opposition parties
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The responses still can help to grasp the
political priorities of different political parties in terms of poverty reduction.
The parties were asked to share concrete actions to reduce poverty. The results had some similarities but also clear differences.
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NATURE OF RESPONSES
In general, the Finnish political parties share a unanimous support for the welfare state.
Many of the parties see that the most desirable way to reduce poverty is to ensure an adequate income security and social benefits.
Concurrent themes in the responses were related to the maintaining of a high employment rate and high-quality public services.
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SUMMARY OF THE RESPONSES
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The National Coalition Party (20.4%) highlighted the importance of employment in poverty reduction and suggested increased means-testing by targeting social benefits to the citizens who need them most (NCP was the only party that proposed increasing means-testing).
The Social Democratic Party (19.1%) did not propose any major reforms to the welfare system but highlighted the need to maintain a high employment rate and to implement new active employment policies.
The True Finns/The Finns (19.1%) emphasized the need for adequate benefits and the implementation of preventive measures to improve the situation of children and youth.
The Centre Party (15.8%) called for adequate social benefits and services as well as improved access to employment by providing flexible arrangements for people with a limited ability to work.
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The Left Alliance (8.1%) recommended restructuring the social security even more towards index-linked and universal social benefits.
The Green Party (7.3%) proposed restructuring the whole social security system by implementing a basic income guarantee in order to reduce the complexity of the current social security system.
The Swedish People’s Party (4.3%) focused almost entirely on improving the well-being and employment opportunities among youth.
The Christian Democrats (4%) called attention to the quality of social and health services and to improving the financial situation of families with children.
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The parties seem to agree that poverty can be reduced through: § Accessible social and health services that are good
quality. § A capacity to prevent social and health problems
before their escalation.
It should be noted that in this case, the parties were asked their poverty reduction measures. § Almost all responses highlighted, not only income
supports, but also the role of wider public policies. 41
POLITICAL CONSENSUS?
As always in politics, based on consensus and compromises, there is most likely a divergence between what is said and what is actually done. § Other societal actors (i.e. labour unions, business sector) § Path dependencies (e.g. conflicted interests and difficulty
to reform the Finnish social and health care system)
Informed citizens are provided an opportunity to follow the implementation of these proposals.
Policy advocates can raise these issues on the public policy agenda.
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IMPLICATIONS IN THE REAL WORLD
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Future challenges of the Finnish welfare state are similar to those of other European nations: § Aging population § Economic instability § Increased inequality § Globalization § Migration
The Finnish challenge is to maintain the quality of social and health services and ensure good access to these services at a municipal level.
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FUTURE PROSPECTS I
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Three possible scenarios on the future of the Finnish welfare state (Hiilamo et al., 2010): 1) The retrenchment of the Finnish welfare state associated with stagnant income supports and benefits (e.g. basic unemployment allowance and labour market subsidy) that do not follow the general wage trend. 2) Incremental and minor increases in social security and moving the Finnish social security system increasingly towards means-tested benefits.
In both of these scenarios, the level of earnings-related benefits would rise faster than non-earnings related benefits.
3) Systematic increases in minimum social benefits that further improve the relative position of citizens at risk of poverty in the lowest income brackets.
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During the past decade, the aim to reduce health and income inequalities may have been less a priority than other policy objectives § Market liberalization, economic growth, short-term
financial savings …
Finland is a well-developed welfare state but continuous efforts and political determination are needed to ensure a favourable social and economic situation in the future.