16/06/2016 – Income inequality is worsening within many countries, and regional disparities in housing, safety and air quality inside countries are also growing wider in many cases, according to a new OECD report.
OECD Regions at a Glance 2016 finds most countries are closing the gap between regions in education and Internet access, but disparities in GDP per head, disposable income, safety and air pollution are widening in many. The disposable income per capita gap between the richest and poorest parts of OECD countries grew 1.5% a year on average over 2000-13, with the biggest increases in the Slovak Republic, Australia, Czech Republic and Canada.
The report, which examines local-level indicators in over 40 countries, shows many regions are struggling to increase the productivity of firms and people and restore employment. Italy, Spain and Turkey all show a 20 percentage point gap between highest and lowest regional unemployment rates, the same difference as between the national unemployment rates of Greece and Norway.
“Understanding the regional inequalities hidden behind country averages can help us to improve well-being and prosperity at a national and global level, in line with the Sustainable Development Goals,” said OECD Deputy Secretary-General Mari Kiviniemi, presenting the report at the European Committee of the Regions 118th Plenary Session. “We need a full dashboard of indicators and our job is to get them all moving in the right direction.”
Regional disparities in household disposable income
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The report covers all 34 OECD countries plus, where data are available, Brazil, China, Colombia, India, Latvia, Lithuania, Peru, Russia and South Africa.
It is accompanied by the OECD’s Regional Well-being website, which shows how 395 sub-national regions in the 34 OECD countries perform in 11 areas: income, jobs, education, health, safety, environment, housing, life satisfaction, civic engagement, community and access to services. It gives them a relative score out of 10 for each well-being dimension.
The website classifies regions as the first administrative tier of sub-national government, for example Provinces in Canada, Länder in Germany and States in the US.
The 11 factors, shown as coloured “petals”, are based on data such as disposable income per capita and voter turnout, measured at a local level. Clicking on a petal reveals the underlying indicator and a scoreboard ranking the region against others and positioning countries by inequality.
The website is part of the OECD’s Better Life Initiative, which includes the Better Life Index, enabling users to compare well-being across countries according to their own priorities.
Other findings from the regional data include:
- Swiss regions score highest for life satisfaction. Hungarian regions score lowest. Life satisfaction scores vary from 4.4/10 in eastern Turkey to 8.6 in Campeche, Mexico.
- Italy, Turkey and Belgium show the biggest regional disparities in employment rates.
- Turkey, Mexico and Israel have the highest income inequality of OECD countries.
- The US, Estonia and Mexico show the biggest regional gaps in health, as measured by mortality rate and life expectancy. At city level, different neighbourhoods of London show a 20-year gap in life expectancy, more than twice the 8-year gap between national life expectancies in OECD countries.
- In 55% of OECD regions, life expectancy at birth now exceeds 80 years. In every OECD region a woman can expect to live almost six years longer than a man.
- Labour productivity is often higher in cities than in rural areas. The productivity gap, measured as the difference in GDP per worker, between urban regions and other areas was 30% in 2013 in OECD countries, with a higher gap in North America and Europe than Asia.
- Wales scores highest of the UK’s regions on safety and Greater London lowest. In terms of a sense of community, Scotland scores highest and North East England lowest. Northern Ireland scores lowest on income and education.
- Mexico has the highest regional variation in homicide rates, ranging from 2.4 murders per 100,000 people in the Yucatan region to almost 65 per 100,000 in Guerrero state.
- The elderly population in OECD countries has increased more than five times as much as the rest of the population in the past 15 years. In 26 of 33 OECD countries, the elderly dependency ratio is higher in rural than urban regions.
Understanding regional variations is important given local and regional governments carry out around 40% of public spending and 60% of public investment in OECD countries. They play a key role in public procurement and providing jobs, education and social services.
“This publication will help to inform us on the new dynamics within Europe, from changing rural and urban populations’ patterns to changing age demographics. The European Committee of the Regions and the OECD have a vital role to play in spreading good practices and guiding countries, regions and cities in the implementation of the OECD’s recommendations,” said CoR President Markku Markkula of the report.
Read OECD Regions at a Glance 2016
See individual country factsheets
Selection of charts from the report
For further information, or to speak to one of the OECD’s regional well-being analysts, please contact Catherine Bremer in the OECD’s Media Division (+33 1 45 24 80 97).
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