Cost of Inequality - UPSC

The cost of inequality extends far beyond the evident gap between the rich and the poor; it permeates every aspect of society, economy, and governance. Inequality not only stifles economic growth but also exacerbates social tensions and undermines the foundational principles of justice and equity. It manifests in unequal access to education, healthcare, and opportunities, creating a cycle of disadvantage that is difficult to break. This persistent disparity erodes trust in institutions, fuels crime and instability, and ultimately hampers the overall development of nations. Addressing the cost of inequality is not merely a moral imperative but a crucial step towards fostering a more inclusive, prosperous, and harmonious world.

Tags: GS Paper – 2, Gender gap- Issues Relating to Poverty & Hunger, Issues Related to Women

Context:

The 2024 edition of the Global Gender Gap Index paints a concerning picture for India, ranking the country at 129th out of 146 surveyed nations.
This placement near the bottom of the rankings underscores persistent gender disparities that have seen limited improvement in recent years.
Comparatively, India occupied the 140th position out of 156 countries in 2021, indicating its sustained presence within the bottom 20 percentile of the index over time.

The Global Gender Gap Index:

The Global Gender Gap Index, introduced in 2006 by the World Economic Forum, serves as a comprehensive measure of gender equality across several dimensions.
These include economic participation and opportunity, educational attainment, health and survival, and political empowerment.
Each sub-index consolidates various indicators to provide a summarised score, and the overall index ranges from 0 to 1, where 1 indicates complete gender parity.
Notably, the index compares the relative positions of women and men rather than their absolute statuses, thus highlighting gender disparities.
While it doesn’t cover every aspect of gender equality, it offers valuable insights into measurable areas that can be tracked over time.
It serves as a tool to spotlight significant statistics rather than offering a comprehensive analysis.
The Centre for Economic Data and Analysis (CEDA) has developed an interactive tracker to monitor India’s progress across these sub-indices and its ranking compared to other nations, contributing to a deeper understanding of gender parity dynamics.

India’s Performance in Sub-indices:

Health and Survival:

In the Health and Survival sub-index, India has achieved a score of 0.951, indicating that 95.1% of the gender gap in this area has been closed.
However, despite this relatively high score, India ranks 142nd out of 146 countries.
While India has made significant strides in health and survival indicators for women, many other countries have made even greater progress, thus pushing India lower in the global rankings for gender equality in health.

Educational Attainment:

Similarly, in the Educational Attainment sub-index, India has closed 96.4% of the gender gap.
Despite this impressive achievement, India stands at 112th position globally.
This indicates that while India has improved educational opportunities for women, its progress lags behind that of many other countries.

Economic Participation and Opportunity:

With a score of 39.8%, India ranks 142nd among 146 countries. Although there has been an improvement from the 2021 score of 32.6%, it remains significantly lower than the 2012 score of 46%.
This sub-index evaluates factors such as labour force participation, representation in managerial roles, wage gaps, and wage parity.
Comparatively, countries like Bangladesh (31.1%), Sudan (33.7%), Iran (34.3%), Pakistan (36%), and Morocco (40.6%) also face significant challenges in achieving economic parity, with less than 30% gender parity in estimated earned income and less than 50% in labour force participation.

Political Empowerment:

In the Political Empowerment sub-index, India has closed only 25.1% of the gender gap, ranking 65th globally.
This marks a decline from the 51st position in 2021, where the score was 27.6%.
The drop is more pronounced compared to the 43.3% score around 2014, indicating regression in political participation for women over the past decade.

Regional Comparison and Broader Economic Implications:

Regional Comparison

India’s position within the South Asian context is concerning, as the region ranks seventh out of eight global regions, with only the Middle East and North Africa (MENA) faring worse.
Among the seven South Asian countries, India holds the fifth position, with Bangladesh leading at the 99th position globally.
This comparison highlights India’s challenges in achieving gender parity, trailing behind several neighbouring countries.
A decade ago, India had narrower gender gaps, suggesting that progress has either stopped or reversed in various areas.
This calls into question whether India should acknowledge these findings and take corrective action, or disregard the metrics and deflect accountability.

Economic Implications of Gender Inequality

Extensive research underscores the significant economic costs associated with marginalising women.
The Organisation for Economic Co-operation and Development (OECD) estimates that gender-based discrimination in social institutions could potentially cost the global economy up to $12 trillion.
Addressing gender discrimination is crucial not only for social justice but also for economic growth.
Integrating gender equality into economic policy-making is imperative, moving away from treating it as a secondary issue to be addressed later.
This approach acknowledges that reducing gender disparities can substantially enhance GDP growth rates and overall economic prosperity.

Social Implications and Long-term Benefits of Gender Equality:

Achieving gender equality is not just an economic necessity but also a social imperative. Empowering women leads to better outcomes in health, education, and overall social stability.
For example, economically empowered women are more likely to invest in their children’s education and health, which has a positive intergenerational impact.
Moreover, when women participate in decision-making processes, whether in corporate boardrooms or political arenas, policies tend to be more inclusive and address a wider range of social issues.
This inclusivity fosters more equitable societies where everyone has the opportunity to thrive.

Key Strategies to Address Gender Inequality:

Educational Investments:
- Ensuring equal access to education for girls and women is foundational. Education equips women with the skills and knowledge necessary for full participation in the economy.
- Policies promoting STEM education for girls can help narrow gender gaps in lucrative and high-demand fields.
Supportive Work Environments:
- Implementing policies that support work-life balance, such as maternity and paternity leave, affordable childcare, and flexible working hours, can encourage greater participation and retention of women in the workforce.
Equal Pay Legislation:
- Enforcing laws that mandate equal pay for equal work is essential in reducing wage disparities.
- Transparent pay structures and regular pay audits can ensure compliance and highlight areas needing improvement.
Entrepreneurship Support:
- Providing women entrepreneurs with access to capital, training, and mentorship can stimulate economic growth.
- Women-owned businesses contribute significantly to job creation and economic diversification.

Conclusion

India’s position in the 2024 Global Gender Gap Index underscores significant challenges, particularly in economic participation and political empowerment. While there have been strides in health and education, there remains an urgent need to address gender disparities comprehensively.

Recognizing the economic benefits of gender equality, India must integrate gender considerations into core economic strategies and foster a societal environment that treats women as equal partners in all aspects of life. This approach not only promotes social justice but also drives sustainable development and prosperity.

Source: IE

FAQs

1. What is economic inequality?

Answer: Economic inequality refers to the unequal distribution of income and wealth among individuals or groups within a society. It can manifest in various ways, including disparities in wages, wealth accumulation, access to education, healthcare, and other resources. Inequality can be measured through indicators such as the Gini coefficient, income percentiles, and wealth distribution metrics.

2. How does economic inequality impact economic growth?

Answer: Economic inequality can both hinder and spur economic growth, depending on the context. High levels of inequality can reduce economic growth by limiting access to education and healthcare, reducing social cohesion, and increasing political instability. On the other hand, some argue that a certain level of inequality can incentivize innovation and investment. However, excessive inequality is generally seen as detrimental to sustainable economic growth.

3. What are the social costs of economic inequality?

Answer: The social costs of economic inequality are extensive and multifaceted. High inequality can lead to poorer health outcomes, increased crime rates, lower levels of social mobility, and diminished educational attainment. It can also erode social cohesion, leading to higher levels of stress and anxiety within the population, and fostering social unrest and political instability.

4. How does inequality affect health and life expectancy?

Answer: Inequality negatively affects health and life expectancy. Individuals in more unequal societies often experience higher levels of stress, reduced access to quality healthcare, and poorer living conditions. These factors contribute to higher rates of chronic diseases, mental health issues, and lower overall life expectancy. Additionally, children in unequal societies often face greater obstacles to achieving good health outcomes, perpetuating the cycle of inequality.

5. What policies can reduce economic inequality?

Answer: Several policies can help reduce economic inequality, including progressive taxation, which ensures higher earners pay a larger percentage of their income in taxes; increased access to quality education and healthcare; raising minimum wages; and implementing social safety nets such as unemployment benefits and pensions. Policies promoting equal opportunities, affordable housing, and financial inclusion also play a critical role in reducing inequality.

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Cost of Inequality – UPSC – Edukemy Blog