Income inequality: why some are doing better than others

Income inequality why some are doing better than others

The debate on inequalities often suffers from shortcuts that presuppose a strong determinism in the evolution of income. “We all know that certain categories of people do not leave with the same chances as others in life, explains Gilles de Margerie, Commissioner General of France Strategy. But what are the parameters that most influence these individual trajectories?”

In an unprecedented study in terms of its statistical scope, the organization responsible for informing public policy has endeavored to prioritize the “inherited” reasons why, in the same age group – French people born between 1972 and 1987 – some do better than others. ‘others. Four factors were studied: social origin, sex, place of residence during adolescence and migratory ancestry. And unlike most studies on the labor market, this one covers all individuals in an age group, whether they are employees in the private sector, the public sector, self-employed, unemployed or inactive.

Social origin, the main factor of inequality

Social origin, defined by the profession of the father and the mother, and classified into three categories – privileged, intermediate and modest -, constitutes the main factor of inequalities. On average, 1,100 euros net per month separates a quarter of people of privileged origin from a quarter of people of modest origin, and this “all other things being equal”.

Because this is the other originality of the analysis: each of the factors explaining the inequalities is calculated by reasoning with comparable characteristics on the other factors, to cancel out their positive or negative effects. “It is a finer approach than the simple comparison of raw data”, underlines Clément Dherbécourt, project manager in the Society and social policies department of France Strategy.

The second explanatory factor is sex. The income gap is 620 euros per month between men and women, or 25% on average. It fell sharply (around -150 euros, at constant euros) between 2010 and 2018, the year of the sample studied. A sign that the activity rate of women or their access to increasingly better paid positions has increased over the period. But the observation is substantially the same according to social origin. The fact of having grown up in an advantaged household does not particularly protect against income differences between the sexes. This income gap is not linked to educational background: women have more qualifications than men but they work in less remunerative sectors or are more often part-time.

Place of residence in adolescence is the third factor. A Frenchman who grew up in Ile-de-France earns 440 euros more per month than his counterpart in Nord-Pas-de-Calais or Languedoc-Roussillon. And if he was born in an urban environment, the difference is 140 euros compared to the countryside, and 250 euros compared to sensitive urban areas.

“No determinism”

Last factor studied, migratory ancestry plays proportionally relatively little in income inequalities. “This is one of the surprises of this study”, recognizes Gilles de Margerie. A Frenchman with at least one immigrant parent from Africa or the Maghreb earns 170 euros less per month than his compatriot without immigrant ancestry. Among individuals of modest origin, “the gap is essentially due to a lower employment rate (87% of the total gap) and the gap unexplained by educational and professional background. These two effects refer at least partly to discriminatory behavior, as numerous works have shown, indicates France Stratégie, which observes, in conclusion, the existence of a “marked” inequality of opportunity but “no determinism”: “The differences between people of opposite social origins essentially come from gaps in educational paths. On the contrary, the gaps between women and men are not mainly linked to the educational path but linked to the labor market, in connection with the birth of children.

On this last point, the finding is clear: 60% of the average income gap between men and women is attributable to the arrival of the first child. Five years after the happy event, men’s income has not changed – it has even increased slightly – while that of women, as a whole, has fallen by more than 20%. It does not matter, moreover, whether they belong to a privileged or modest social category: the dropout is almost the same. A real subject of public policy, for once.

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