Abstract:An equitable distribution of living standards is a central pillar of cohesive societies. Although shifting wealth has brightened the prospects for global income distribution, the transformation of the global economy raises key distributional challenges for social cohesion. A cohesive society reduces inequality between groups and ensures that all citizens ‐ the poor, the middle‐earners, and the rich ‐ are socially included. Building a common understanding of what constitutes an adequate standard of living ‐ and how to help those members of society who do not reach it ‐ is an integral part of building a cohesive society. Understanding the complex interactions between opportunities, endowments, and market outcomes underlying distributional change is necessary to the establishment of a development strategy that takes into full account the specific needs and characteristics of a country. Education can help by addressing inequality of both outcomes and opportunities ‐ raising the minimum level of education can offset inequality‐increasing pressures originating from the structural changes that shifting wealth has brought with it. Preferences for redistribution as a means of reducing inequality differ from country to country and change over time ‐ understanding how is an additional challenge for policy makers trying to build social cohesion.
Document Type: Review Article
Publication date: November 1, 2011