Evidence review: ‘Creating more Equal Societies – What Works?’

Creating more Equal Societies – What Works? was published by the European Commission in June 2016.

The aim of the review by Abigail McKnight, Magali Duque and Mark Rucci is to assess the effectiveness of education, wage setting institutions and welfare states in reducing inequality. Education both empowers people and provides them with tradeable skills to secure a decent income – greater equality in individuals’ ability to generate income in the labour market is key to producing more equitable outcomes.

Evidence shows that imbalances in power result in some workers being underpaid while others are overpaid. Collective wage bargaining and minimum wages have proved to be successfulin reducing wage inequality.

Curbs on the power of top executives, power which has allowed them to take an increasing share of the wagebill to the detriment of other workers and form a politically powerful elite, need further development.

Welfare states need to evolve to meet the challenges of ‘new inequalities’ and changing employment landscapes, but are essential now and will continue to be essential in the future to help individuals redistribute income over their own lives as well as between the rich and poor.

Two other reviews were published in June 2016: