With worsening inequality, the demand for inclusive policies has been continuously increasing. In particular, COVID-19 has highlighted the multidimensionality of inequality by exacerbating existing disparities while accentuating relatively newer factors of inequality. As such, inequality measures have diversified, and a thorough understanding and appropriate use of measures has become a prerequisite to designing and implementing an inclusive policy.
In this context, this report studies measures of economic, gender, and digital inequalities, dimensions that have been highlighted during the pandemic. The report compares the purpose, data, calculation methods, and strengths and weaknesses of each measure and illustrates how each measure depicts the current status of inequality. Out of various inequality measures, the report focuses on measures that are either commonly used in the international community or built for specific purposes. By doing so, the report provides useful basic information on inequality measures for policymakers or researchers for future utilizations.
To be more specific, Chapter 1 briefly examines the current inequality state, international community’s responses, and the impact of the pandemic. In particular, by overviewing the rising importance of economic, gender, and digital inequality due to COVID-19, Chapter 1 provides background explanations as to why Chapters 2-4 focus on measures of economic, gender, and digital inequality, respectively, and explain contributions of each chapter.
Chapter 2 analyzes measures of economic inequality, particularly income inequality. Among numerous measures, those used as analysis tools by Korean government ministries and international organizations are selected. For example, measures based on the Lorenz curve, such as the Gini coefficient and the Hoover index, and those based on income shares, such as the Palma ratio and the quintile share ratios, are included. Also, measures focusing on welfare like the Atkinson index and newer measures like the Co-Prosperity index from the World Bank are selected for the analysis. The report lays out the basic information on the measures and compares strengths and weaknesses to show that measures are complementary to each other.
Chapter 3 introduces indices that measure gender inequality and depicts levels of global gender inequality using each measure. Measures include the most widely used integrated indices, region-specific indices, subject-specific indices, and indices that measure factors of gender inequality. By introducing indices with various characteristics, Chapter 3 emphasizes the multidimensionality of inequality and enhances the understanding of gender inequality.
Chapter 4 introduces indicators related to the use of digital and information and communication technologies that are frequently used to analyze digital inequality. In particular, various indices measuring differences across- and within- countries, including gaps between companies or classes, are introduced to enhance the understanding of the new dimension of inequality caused by a structural social change called digitalization.
Finally, Chapter 5 compares the relationship among the three dimensions of inequality covered in each chapter across countries. The report finds that the correlation amongst the three dimensions is heterogeneous across countries, emphasizing the multidimensionality of inequality and the importance of understanding various measures of each dimension.
Understanding how to measure inequality is crucial throughout a policy implementation process, from diagnosing the status quo to setting policy goals and evaluating policy performance. Accordingly, this report enhances understanding of economic, gender, and digital inequality measures by comparing the methodologies and using them to depict the current status of inequality. Inequality will further diversify with socio-economic structural changes such as climate change and trade wars. Therefore, it is necessary to respond to not only the existing inequality problems but also the problems that will arise in the future through continuous understanding and analysis of accurate measures of inequality dimensions.