The chapter embraces the definition of diversity which refers to the composition of a society, namely to economic, cultural and physical differences among individuals and groups within a society, due to differences in race, language, ethnicity, nationality and gender, to mention a few. This chapter surveys the empirical literature on social fractionalization and diversity, focusing on two aspects. The first main section of the chapter is devoted to the choice of the variable used to identify groups and to the associated datasets. The second main section reviews studies that have investigated the impacts of social fractionalization and diversity on a number of socioeconomic variables, such as growth, development, quality of institutions, rise of conflict and wages.
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Mariateresa Ciommi, Ernesto Savaglio and Stefano Vannucci
Over the last decade, the assessment and measurement of diversity has increasingly become an object of interest for economists and other social scientists. The concept of diversity can be applied to a wide variety of contexts, spanning from biodiversity and conservation policies to socioeconomic diversity. The first main section of this chapter is devoted to the conceptualization and measurement of diversity. Alternative taxonomies proposed in the existing literature are discussed and the axiomatic approach to the analysis of diversity is illustrated. The second main section of the chapter is devoted to the measurement of fractionalization, namely to the analysis of diversity when the population is partitioned according to social characteristics, such as language, religion or nationality. The most relevant fractionalization indices are presented, highlighting the links with other disciplines such as ecology, biology and sociology.
The chapter discusses how economic insecurity has been measured, and the implications of different measurement strategies. After clarifying the common conceptual elements in available definitions of economic insecurity, it presents a summary of the four main measurement strategies developed in the current emerging empirical literature on economic insecurity, which emphasize: (1) large income losses; (2) the buffering role of wealth; (3) income volatility relative to personal trend; and (4) the hazards of unemployment, illness, family break-up and old age. Although there is now no consensus on which measurement method produces the best explanatory measure of economic insecurity, results are qualitatively similar and robust across different methods. Concluding remarks emphasize the importance of economic insecurity for public policy.
Nicholas Rohde and Kam Ki Tang
Research on economic insecurity has been largely neglected by the literature up until recently, partly due to its highly subjective and idiosyncratic nature, and partly due to the fact that it deals with unobservable forward-looking expectations. These underlying issues make objective and comprehensive measurement difficult, and a commonly accepted framework for the analysis of economic insecurity is yet to be established. This chapter aims at focusing on the discussion of some of the generally agreed-upon issues around the measurement of economic insecurity, by providing a notion of this concept in the context of welfare analysis and introducing different approaches to its measurement. Final remarks stress that current measurement techniques are still exploratory rather than definitive.
Carlotta Balestra, Romina Boarini and Nicolas Ruiz
The chapter presents an overview of several challenging issues related to the assessment of well-being through measures aimed at looking ‘beyond GDP’. Although designed to measure aggregate economic performance from a macroeconomic perspective, gross domestoc product (GDP) has been extensively used to measure welfare, with a number of problems and limitations. Starting from the mid-1970s, criticisms to this approach encouraged early attempts to create alternative measures for GDP. The Great Recession and inequality considerations further prompted the discussion through national and international initiatives. These gave birth to a set of measures and frameworks which focus more on the individuals, entailing considerations on the distribution of well-being, multidimensionality and subjective perceptions. The chapter reviews some of these measures, addressing the main issues and techniques as well as outlining the greatest statistical challenges linked to the measurement of progress and well-being.
Enrico Giovannini and Tommaso Rondinella
Since the introduction of the System of National Accounts, gross domestic product (GDP) has become a synonym for growth and development. However, this indicator offers a rather narrow view of economic progress, neglecting to represent social aspects as well as the environmental consequences of economic growth. This chapter presents a review of the debate around the need to go ‘beyond GDP’, stressing aspects such as multidimensionality, basic needs, utilitarianism, subjective well-being, capabilities, and the methodological issues related to the aggregation of measures of well-being. Inequalities and sustainability are addressed separately, together with the specific challenges set by their measurement. The chapter stresses the importance of the involvement of stakeholders to guarantee democratic legitimacy for the indicators used to overcome the narrowness of GDP. The chapter ends with a discussion on how multidimensional approaches to well-being are increasingly setting in, as epitomized by the indicators of the 2030 Strategy with the Sustainable Development Goals.
Suman Seth and Antonio Villar
This chapter is devoted to the discussion of empirical findings related to research on the measurement of human development, inequality, and poverty. It is divided into three main sections. The first of these three sections discusses some practical concerns raised about the Human Development Index and how these concerns have been empirically addressed. The second section discusses various empirical studies and findings relating to the level of human development and the level of inequality in human development. Finally, the authors discuss the empirical research and findings relating to multidimensional poverty.
Suman Seth and Antonio Villar
This chapter is devoted to the discussion of the measurement of human development and poverty, especially in United Nations Development Programme’s global Human Development Reports. The authors first outline the methodological evolution of different indices over the last two decades, focusing on the well-known Human Development Index (HDI) and the poverty indices. They then critically evaluate these measures and discuss possible improvements that could be made.
The idea that high levels of polarization in society can lead to social instability and conflict has motivated an increasing interest in the analysis of income and social polarization. This chapter aims at providing a review of the main empirical findings resulting from the application of income and social polarization indices. The two main approaches to the study of income polarization are introduced. The first focuses on the rise of separated income groups, while the second addresses the decline of the middle class. Both approaches have been applied to the study of social conflict. Alternative methods for monitoring income polarization based on nonparametric density estimation techniques are also illustrated. Empirical applications of social polarization indices are then discussed. Finally, other applications are presented, such as health polarization, effects of taxation on income polarization and the link between wage polarization and labour market mobility.
The concept of polarization is related to the clustering of individuals forming groups in different parts of a given distribution. The existing relationship between polarization, socioeconomic stability and economic growth has contributed to motivating the interest in the study of polarization. In the empirical literature, polarization measures have often been used to explain episodes of social tension or conflict. This chapter aims at providing a wide overview of the different approaches that have been proposed so far in the conceptualization and measurement of polarization. Most contributions to the measurement of polarization can be classified into two categories: income polarization and social polarization measures. The former measure the extent to which individuals are clustered around local and opposing poles in the income distribution. The latter try to capture the notion of polarization related to non-income characteristics, such as ethnicity, race or religion. Both types of polarization measures are explored.