ESD

Compare the provision of health care with the provision of education in developing countries

Health care: medical staff absenteeism, adequacy of supply bad, corruption. » \n \n Education: schools' infrastructure and supplies bad, teacher absenteeism and lack of teacher, corruption problem. »

Mauritius, just like Belgium, have no mineral wealth. But Belgium and Mauritius are rich country. So, what is our strength? Is the mineral wealth helping or not the economic development? Why?

democratic countries \n \n geographic advantages \n \n corruption problem \n \n small countries

If we stop having children today, say in particular in Africa, when will we see the effect of that on population growth?

Population is a tanker --> slow feel changes 20/30 years

Can you predict the population in 2015 when you see the 2000 population graph?

Yes, we can know that the old will die and calculate the number of births with the current fertility rate.

In if year t we have more male children born than female ones, what will happen 30 years after?

In 20 years when they normally decide to have children, there won't be enough girls. The boy won't be able to find a wife à decrease in the population due to a diminution of the birth rate.

What is modernization theory?

underdeveloped countries are going to develop and reach the level of development of the developed countries. They are only late in the process. It is the only path possible. \n \n more optimistic

What is World system theory ?

the world is divided in three parts: the core, the periphery and the semiperiphery. The last parts are dependent on the core because of colonization and the power the core exercises on it.

Is it correct to say that the population does not benefit from policies implemented by autocrats?

No. The stationary bandit and the population have coincident interest nevertheless the first aim of the autocrats was not to give benefit to the population. His aim is to maximize his revenue that he gets from the taxes. So, he is interested in the well-being of citizens only because their well-being involves better economic performance and so more taxes for him. His policies benefit the population even if it is not his aim. Moreover, in an autocracy the policy does not need to benefit the most people because no election or no "true" election is held. » \n \n The benefit of the population is a by-product.

Does this mean that the population in an autocracy cannot get rich?

No, as long as you go along with the political power there won't be any problem. They should not oppose him and cannot freely express themselves about the autocrat. The population getting rich is an advantage for the autocrat because it means more revenue from the taxes for him.

Explain the word "white elephant"

Infrastructure projects that are expensive but are either without benefit or inefficient for development. For instance, a bridge connecting the river but no road that leads to the bridge. They are common in developing and developed countries because of the clientelist attitude of politicians

In which of these propositions they will more probably be corruption in developed and developing countries : infrastructure, health, education and banking?

Infrastructure \n \n In developing countries, the biggest part of infrastructure is delivered by the government. They are then exposed to all the problems of the government: corruption... In developed countries, most of the time infrastructure are handled by independent regulatory agencies. But even with the present of these agencies there can be corruption. Indeed, the agencies need to be very strong because they are facing a two-faced pressure: pressure from the private sector and political influence. The private sector is better informed on costs and technical aspects and politicians want to be reelected in democracy or to satisfy their friends in autocracy.

Explain the formula of the return on education

Mincer equation (named after Jacob Mincer) : y = a + bt + e

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y = wage

t = years of education

b = dY/dT: the marginal effect of one year extra of studying: the extra wage that you are going to earn for one more year of study

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Effect on y from variation of t: The amount of salary that I will have in return from studying more

3 criticism of the formula of the return on education

It captures only the minimum return/private return and does not capture externalities (so underestimation of wage) \n

It does not deal with quality of education \n

They are omitted variables. For example: gender, talent, health situation, motivation, parent education, ... So maybe overestimate the effect of t on Y. \n \n It is estimated that one more year of education leads to 26% more income (overvalued) so Duflo reestimated a return of 21% with less bias during an experiment in Indonesia

Measure to cope with urbanization in developing countries

==Rural-urban linkage==: offering new market to farmers, providing income, reducing import dependency, reducing move to the city \n \n ==Development of sustainable infrastructure==: Europe should give innovation (use of solar energy...) for industrialization to Africa so they can avoid pollution and have economic development. Africa should not copy the mistakes of developed countries during industrialization. \n \n ==Family planning services==: lower fertility so less people in cities \n \n ==Development of secondary cities==: for the moment everything is concentrated in the capital. The development of another city can relieve the pressure on the capital and also give the opportunities granted from the city life. It can avoid the problem of mega cities but better organize the relation between rural areas and cities. For example: same problem in Brussels: all the roads lead to the capital

"Inequality regarding access to higher education and health are higher between poor and rich countries rather than within the country". True of False? Explain

False \n \n In developing countries, the inequalities are big between rich and poor (bigger within the country). One of the raisons is corruption. The best infrastructures are only for the rich one, you need to make informal payments to see a doctor, you can pay your teacher to have better grades, the richest students go to private schools and have better education and better opportunities.

Explain the age cohort violent conflict effect

Violent conflict will cause death. But population is a tanker so the change in population growth will only be felt in 20/30 years. When the generation affected by the conflict becomes adult there will be less adults so less children and so a lower population growth

Following the theory of roving bandits, what is the optimal imposition rate?

the one that is not too high to not discourage the population to work (opportunity cost) but high enough for the autocrat to receive a good amount of money

What is the difference-to-difference approach? How could we use it to determine the return of a constriction of a school policy?

The difference-in-differences method is a quasi-experimental approach that compares the changes in outcomes over time between a population enrolled in a program (the treatment group) and a population that is not (the comparison group). It is a useful tool for data analysis. \n \n With this approach, we can test a specific policy: here the politic of schools construction. \n \n We could compare two groups: the one who benefits from this politic and the one who does not

What are the most used anthropomorphic measures for adults and for children?

For children between 0 and 5 years old : \n \n -Long term indicator for health: height \n -Short term indicator for health: weight \n \n Eating a lot gives higher weight but does not have a direct effect on height. \n \n Another indicator: HAZ = (height in cm - mean height reference)/standard deviation reference. HAZ is a normal function. The mean is calculated by the WHO on all the children in the world. \n \n HAZ > -2 : not malnourished \n (-3 )< HAZ < -2 : moderately malnourished \n HAZ < -3 : severely malnourished \n \n For adults: BMI = weight in kg / (height in meters)2

Link between income and democracy

Democracy is a normal good: positive correlation between income and democracy. The increase of urbanization, education, complexity and capabilities increase the demand for democracy. Countries with higher income per capita tend to have higher democracy scores but this is not the case for everyone (see oil-exporting countries). We also see that there is no relation between a change in income and a change in democracy score. --> importance of other factors like the education.

5 different measures of health

==Self-reported health status==: in surveys, subjective \n \n ==Self-reported symptoms==: precis and objective \n \n ==Reporting daily activities== \n \n ==Nutrient intake==: caloric intake from household food consumption \n \n ==Anthropometric measures==: height, weight, body-mass index (see before) measure trough time \n \n ==Disability adjusted life year==: effectiveness of health interventions

BMI and income for USA and Brazil

The income in Brazil is positively correlated to the BMI because a big part of the work there is manual work so need to be in good health. But in the USA, there is no correlation (because more «intellectual» work).

Explain the point of views of Sachs

poor people are poor because there are hot, infertile, malaria infested, and often landlocked. They need a large investment to be productive and help them with these endemic problems. But they can not pay for the investment precisely because they are poor so they are in a poverty trap à Need for foreign aid

Explain the point of views of Easterly

foreign aid undermines local institutions and prevents people from searching their own solutions. It corrupts and creates a self-perpetuating lobby of aid agencies à let the poor find their own solutions, they will do better.

Explain the point of views of autor "Poor economics"

Poverty is a trap but not all aid is good, we need to see how the money is spent. Poor people are so stressed by the daily survival that they don't the have mental space to make plans for the future. Money transfer relieves you from a stress and makes you more productive, especially when the transfer is regular. CCL: well-spend foreign aid, with good information about the daily lives and data, can be useful, not just giving millions and thinking the problems will be solved.

Give two different ways to measure poverty

==Money metric utility==: look at the minimum expense required to meet a given level of utility. Problem because people have different needs and choices and access to public goods are ignored. \n \n ==Capability approach==: look at the ability of people to determine and achieve what they value to do and be (make a career, decent living arrangements, friends). More complicated (how to measure) but broader definition of poverty.

Give three different types of poverty line

==Relative poverty line==: relative to others in the population (ex: below 60% of the median income) \n \n ==Absolute poverty line== \n \n --> extreme poverty line (1$/day) = food poverty line: you don't have enough money to buy food for your daily activities based on the local food basket of the poor households (2000 cal/day) \n \n --> poverty line (1,25$/day): poverty line that includes non-food necessary stuff (clothes, bus) \n \n ==Multidimensional poverty==: based on evaluation of the living arrangement and according to several indicators such as education, disability, income

Very poor people still buy non-food goods?

Yes. If I get richer, I am going to spend more money on food but with a declining rate. But some people need to sacrifice money to non-food even if they could have reached the 2000 calories because they need it. Graph: the food expenditures line is curved. \n \n All extra money should go to food to have more energy but it is not the case (income elasticity of food expenditure < 1). \n \n Moreover, the money that people spent on food is not spent to maximize the intake of calories. The poor are not irrational, they just also want to have fun and social relationship so they sacrifice some food for that. It is thus taste-based. à A nutrition-based poverty trap exists however in some exceptional circumstances.

What are the empirical challenges of the Poverty Transition Metric?

==Poverty transition metric (PTM)==: show how many people moved out of poverty, stayed poor and fell into poverty \n \n ==Method change==: countries do not per se use the same method \n \n ==Price change==: need to deflate » Collect panel data = several rows of data collection over time (same people to see if improvement) \n

==Limitations across countries==: non-tradable goods and services are not always taken into account à need for use of the purchasing power parity (PPP) exchange rates

Explain the Randomized Controlled Trials

Economists take two similar groups (a control group that gets nothing and a treatment group that gets, for example, money) and see the output after a certain time. \n \n First find an eligible group (people with the same conditions) and then we choose people randomly = random allocation. \n \n Ethical rule: if you know that something is working in the treatment group, you need to give it as soon as possible to the control group

Why is the well-being intergenerational?

To ensure well-being as an adult, people need an income. To get one, they need schooling. To pursue school, they need cognitive and non-cognitive abilities that are determined early in life or during childhood and are also affected by the health in utero. It is thus intergenerational. \n \n Studies showed that deficits in utero or in the early life have consequences decades later on the wellbeing. Being undernourished as a child (0-5 years) has life-long consequences: the child will be smaller, his genetic potential won't fully developed, the brain won't develop the way it should.

what is a low-hanging fruits?

a problem with a quite easy solution. Example: many children die from preventable diseases like diarrhea but there are solutions cheap and effective (solution of sugar and salt), same with chlorine, we can add it to a water source and it will pure the water.

Why are there low-hanging fruits?

==Spend a lot when someone is ill==: they care about to cure but they are not prepared to spend a little bit of money to prevent someone from being sick. Also, because effects of prevention are not always visible so they could think that it changes nothing. \n

==Problems of the health system==: \n \n --> Low quality of care (lack of trust) o High absenteeism o Very expensive (weak public sector so people have to pay under the table) \n \n -->Personal beliefs (immunization and use of witch doctors) \n \n \n ==Solutions for the health system==: government has a huge part to play \n \n -->Massive investments and tackle the trust of people and their beliefs \n \n -->Subsidize/Give nudge (free distribution, low prices, small nudge to overcome the threshold) \n \n -->Stop corruption among the healthcare system \n \n -->Quality of governmental institutions impact quality of health care \n \n -->Cheap drugs and development: the potential revenue is not large enough for pharmaceutical companies to develop drugs to eradicate diseases in developing countries which is why multilateral promises to buy drugs for poor nations are needed and funding from the public sector

Explain the poverty trap theory

==S-shape==: below a certain level, our income of tomorrow will be smaller than our income today, we are thus trapped in poverty, we don't get to the increasing part of the curve because our income is very low. Some people think that a big push is required to be able to invest and get out of poverty. \n \n Example of the poverty trap vision: people are too poor to buy fertilizer so their production does not increase so they remain poor

What is the Conditional Cash Transfers (CCT) ?

mechanism where parents are given child allocation benefits on the condition that their child goes to school. If the school notes down absences, the lose the benefit. à the purpose is to raise awareness to parents to send their child to school and increase the revenue of parents.

What is the Unconditional Cash Transfers (UCT) ?

people get a transfer of money without condition. \n \n The enrolment figures where the same for CCT and UCT because even If there was no condition, parents sent their children more because they were less cash constrain

What are the supplys' wallahys?

think we will solve the education problem by building more schools, having more teachers and giving more handbooks à more supply

What are the demand's wallahys?

think that when parents or children are not interested in education, they do not go there even if there is supply

Measures of education

==Average years of schooling for adults==: not representative of the quality of the school system because more class repetition leads to more years of schooling. Moreover, it says nothing about the quality. \n \n ==PISA test==: test basic mathematics and reading. Many countries are not performing well

What are the returns to education

==Education is a human capital investment==: people invest in schooling because they believe an extra year of education gives a better salary. \n \n ==Private return of education==: the personal income increase that you get thanks to more education. \n \n ==Externalities==: other persons benefit from the education of one. (ex: society and doctors). \n \n ==Education return== = private return + externalities (externalities > private return)

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What reforms could be implemented in order to have a better education?

==Giving incentives to teachers==: carefully crafted as a bonuses and penalties system to reduce absenteeism and pay them more so that there is less corruption. \n \n ==Decentralization==: a decentralized education can encourage monitoring of system and teachers but there is a mixed success. \n \n ==Vouchers==: recognition from the government itself that the public school system is not working and giving money to households in order to pay for the private education à mixed success. \n \n ==Reducing education costs==: conditional or unconditional transfers, school meals (link between health of children and schooling, provide free uniforms, textbooks, ... \n \n ==Reducing the educational gender gap==: reduce cost so that boys do not have the priority and more female teachers

What where the tree generations of global population dynamics?

1st generation: Thomas Malthus (1766-1834) \n \n 2nd generation: Esther Boserup (1960) \n \n 3rd generation: Political economists

Explain the 1st generation: Thomas Malthus (1766-1834)

population grows exponentially while food production increases linearly. At some point there will not be enough food production to sustain the growth of the population. Famine (Mathusian trap). He pleaded for less children per woman.

Explain 2nd generation: Esther Boserup (1960)

Malthus did not foresee the increased technological advancement thanks to the industrial revolution. Scarcity creates creativity and institutional changes. For her, population improves technology and innovation.

Explain 3rd generation: Political economists

Boserup was too optimistic, growth is not as good as she said. There are fights for leadership and resource capture. Hunger is not a problem of production anymore, it is a problem of distribution. Contrary to Mathusian predictions, the global population is likely to stabilize because of declining fertility in developing countries and ageing population in developed countries

Explain the economics of fertility choices

==Income effect==: if it dominates, a reduction in cost of a good is going to increase consumption of both goods. \n \n ==Substitution effect==: if it dominates, a reduction in a cost of a good is going to increase its consumption and lower the consumption of the other one. \n \n The income effect dominates when there is a decrease in the cost of children and the substitution effect dominates when there is a decrease in the price of other goods. \n \n ==Inferior goods==: goods for which demand decreased when people are richer (ex potatoes) \n \n Children are normal goods but the number of children can be an inferior good in developed countries. There is a quantity-quality trade off: if you want to provide good quality of life you have less children. The opportunity cost is higher.

How can we measure corruption?

==Objective measures==: count the number of criminal indictments for corruption of a country (ineffective because the ratio from criminal indictment to real corruption is highly variable). \n \n ==Subjective measures==: perception surveys: ask people for example CEO's of countries, to rank countries by how much corrupted they are. à Corruption Perception Index.

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Poverty triggers more conflict or is it the other way around?

Reverse causality: poor people are more ready to fight due to less opportunity cost. Therefore, less income induces more conflict. BUT Winner wins the prize: the highest the prize (income of population/natural resources) the more effort is devoted to fighting for it. If there is a shock in the economy that makes people poorer, the first example would predict more conflict but the second theory do not predict the opposite. A positive shock to the economy would raise conflicts because there is more to gain.

What is the greed model of Collier and Hoeffler?

Prize effect: if a country has high shares of natural resources in its export, the probability of war is higher

What is the grievance model of Collier and Hoeffler?

Rebels fight because they are frustrated for different reasons: inequalities of wealth and income, ethnic fractionalization, low level of political rights. \n \n The greed model works better than the grievance model when it's applied to data. \n \n Motivation can also change during the conflict.

Explain the two ways colonization could happen?

==Extractive way==: Colonizers extracted resources thanks to slaves, cut threes, and transported the wealth to their own country. It has a negative impact on GDP/capita still today. Countries chosen if the place was not livable for Europeans (diseases). Colonizers did not care about the people living there. Those countries inherited very bad institutions. » \n \n ==Migrative way==: Colonizers established long-term residing. Lots of people migrated there and stayed not just for the extraction but to build a new life. The migration way has a positive impact on GDP/capita today. Countries chosen if the place was livable for the Europeans. Colonizers invested in a justice system, freedom of speech, enforced property rights, ... Those countries inherited good institutions.

What is stationary bandit with the use of tax rate ?

does not destroy things, he maximizes his long-term revenue. he invests in the health of the economy he can benefit from. There is a higher return to heavily tax people again and again every year than stealing just once. Tax rate: at the optimum so that they maximize long term profit while citizens continue to work hard.

What is roving bandit with the use of tax rate?

cares about current revenue and disregards long term consequences. He destroys health and only takes once, he does not care about the citizens. Taxe rate: 100%. They take everything and then the citizens do not work because they know they receive nothing

What is the link between development and megacities?

Cities are motors of the economic development because of the concentration of brains, workforce, infrastructure which leads to innovation. \n \n In cities, people are more likely to get educated and to get information. Almost all movements for democracy are based in city \n \n Cities lower fertility which can accelerate the demographic transition. \n \n Cities offers access to basic amenities not available in rural areas, it creates job, it reduces pressure on land, ... BUT cities are not prepared for exponential growth: lack of adequate infrastructure. Cities are victims of their own success: unemployment, crime, pollution, congestion, traffic, they become failure places. \n \n One of the biggest political challenge will be to offer people opportunities in cities. \n \n Solutions: 1. development of secondary cities to make sure that people can stay in the countryside and go in the near secondary city fir some amenities and find a job. 2. development of sustainable infrastructure (not copy the mistake of the developed country during industrialization). 3. Rural-urban linkage: offering new market to farmers, providing income, reducing import dependency, reducing move to the city.

Understand the difference between poverty and social inequality

Poverty is a multi-dimensional concept that reflect a minimum quality of life that you wish to have. Social inequalityis more about the distribution of resources (of all type, for example: wealth, education, etc.). \n \n Countries can be rich and unequal (or poor - unequal or rich - equal or poor - equal).

How can we measure poverty?

the Ravallion method \n \n the at-risk-of-poverty-rate \n \n the material deprivation indicator \n \n Europe strategy 2020

What is the Ravallion method?

(= the world bank approach): it considers that 1$ per day is necessary to get a food basket giving 2000 calories (à increased to 1,45$ according to Ravallion BUT 1,24$ according to the UN otherwise the amount of poor people will be too high). We can also measure it with calories/day so in extreme poverty if less than 2000 calories/day. The threshold was adapted for EU countries: absolute poverty line: 2,15$ and vulnerability to poverty line: 4,30$. There is hardly any food poverty in the EU.

What is the material deprivation indicator ?

A first version of this indicator (2009): if you cannot afford 3 of these 9 elements, you're considered poor (EU 3+deprivation measure for extreme poverty). Then in 2010, 3 criteria added (EU 4+), if we cannot afford 4 of these elements, we are considered poor. In 2016, they dropped a few criteria and added new ones: the new EU deprivation measure for poverty. The (new) items are: - face unexpected expenses - one-week annual holiday way from home - to pay for arrears - a meal with meat or fish every second day - to keep home adequately warm - replace worn-out furniture - replace worn-out clothes - 2 pairs of properly fitting shoes - get together with family/friends for drink/meal at least once a month -regularly participate in a leisure activity - to have a personal car - spend small amount of money each week on yourself - internet connection - leaking roof/damp walls/floors/foundations or rot in window frames - no bath or shower - no indoor flushing toilet for sole use of the household. Poverty is now seen as a multi-dimensional concept, going beyond monetary dimension.

What is Europe strategy 2020 ?

which is a combination of at-risk-poverty-threshold, material deprivation 4+ and people living in jobless households.

How has the poverty line evolved since 1990?

The absolute poverty line was fixed at 1$ per day in 1990: inspired by the work of Ravallion (French economist). In 2008 Ravallion revised the threshold from 1$ to 1.45$ but the UN decided to use 1.24$ rather. Because with the new threshold the number of poor people will be too high, and the goal fixed never reached. For the EU countries there has been an adaptation at 2.15$ per day

Explain what is "at-risk-poverty rate"

It is a relative approach of measuring poverty rather than an absolute one. It is the proportion of people in a country whose net income is less than 60% of the national median. The use of median rather than mean is important because it is not influenced by the extreme values. Beyond this rate, there is poverty as a lack of basic physical need. This indicator can be calculated at different thresholds or anchored at a point in the time or even calculate the gap.

What is the risk of the one dollar poverty line used by the World Bank for Europe?

Almost nobody in Europe lives under this poverty line. This measurement will then not be able to reflect the poverty in Europe. Indeed, the measurement works for poorer countries but in Europe it costs much more. \n \n We should not only assure that people can survive but also that they can live in good condition.

Why do we also use deprivation measures (3+ or 4+) in Europe?

The measurement in Europe for poverty is different from the one used in other regions of the world. Poverty does not only depend on the revenue but also on the ability of someone to meet his basic physical needs. Some people do not have revenue but are considered rich. Poverty is a multi-dimensional concept (going beyond monetary dimension) that reflects a minimum quality of life that you wish to have.

Why is the at-risk-poverty rate the same for Romania and the UK while the threshold of poverty is different?

We need to be careful when comparing two countries and their level of poverty. The two countries do not have the same living standard and income. Moreover the 60% threshold is an arbitrary choice. \n \n It is a relative measure rather than an absolute measure so the reference point can be different for each country.

Why is social inequality a problem following Wilkinson and Piketty?

In societies with more inequalities there are more social problems such as higher suicide rate, higher stress level, ... There is a clear correlation between numerous social problems and social inequalities. Also, social inequalities increase social tension.

Grasp the different ways to conceptualize and operationalize social inequality

==Lorenz curve==: cumulative income frequency. It is a way of showing the distribution of income (or wealth) within an economy. \n \n ==Gini coefficien==t (synthesis of Lorenz curve): 0 if total equality (equality line = real distribution) and 1 if total inequality (all income in the hands of one person) \n \n ==The percentiles==: how wealth is allocated within the population. In Belgium, the poorest 20% own only 0.17% of all wealth and the richest 20% own 61,2% all wealth in Belgium. \n \n ==Look at the life expectancy and the living standard conditions==: Inequalities have real life consequences. For example, it has an impact on life expectancy since the level of education is highly correlated to the level of income and wealth. Also, mental illness, drug use, homicides rates, rates of imprisonment, ... are more frequent if there are inequalities. More risk of conflict. » The capital/income ratio: historically, the higher the capital/income ratio, the greater the inequality of wealth. Richs get richer become they have capital and not because of real activities. \n \n ==Top income tax rates==: After WW2, the rates exploded. But in the 1980s, the top income tax rate dropped to 55%. Neoliberalists think that the government should intervene as little as possible. \n \n ==Private capital in rich countries==: Overall increase of the importance on private capital since there is less taxation on very wealthy people and on the high-income revenue. \n \n ==Top inheritance tax rates and share of inherited wealth in total health==: If the state does not intervene, inequality and the ratio capital compared to income will only increase. \n \n ==Increase in inequality==: the increase of inequality does not necessarily mean that the population became poorer or that the number of poor increased, it is just that the distribution of wealth becomes more and more desequilibrated and the richest people get a bigger part of the economic growth.

reflect upon both causes and consequences of social inequality insights from, Wilkinson VS Pickett

For Piketty, capitalism increases inequalities but for Milanovic, capitalism decreases inequalities. For example, during war, the real winners are farmers and their inequalities decrease because they had food and they can eat or sell it (the price of food during war increase so farmers can become rich). The real losers during war are the laborers and bourgeoisie. + If someone invest in a country to build something and this thing is destroyed by war, the investment is lost and the inequalities decrease (because investors are mostly rich people)

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reflect upon both causes and consequences of social inequality insights from Piketty

Global economic growth is slowing, wealth inequality will increase and social tension will likely also increase \n \n Peaceful remedies to these social tensions will require increased government revenue \n \n Democratic societies need serious discussion when choosing the best remedies. Theory of Piketty (r>g) : in the future the growth on the stock market will become bigger than the real growth (so, profit made on financial market will increase) à if this occurs, it will be more interesting to invest money rather than creating something real in the economy (same prediction as the IMF and other important institutions).

reflect upon both causes and consequences of social inequality insights from Milanovic

the elephant curve shows the change in real income, at PPP, between 1988 and 2008 (%) according to the percentile of global income distribution. It shows us the impact of the globalization and deregulation of the markets in the last 25 years. This curve shows the winners of globalization: those who are producing get a part of the income (e.g. the middle class in emerging economies such as China) and the very rich which take important part of the income coming from economic growth because they have a high return on capital, not because they produce. The losers are the citizens of rich countries with stagnating incomes, the population of former communist countries and also the very poor where incomes remain almost unchanged over this period. This curve had a huge impact on several decision like the Brexit or the election of Trump because people think they are the losers of the globalization even if they are still rich.

Explain the elephant curve

Milanovic: the elephant curve shows the change in real income, at PPP, between 1988 and 2008 (%) according to the percentile of global income distribution. It shows us the impact of the globalization and deregulation of the markets in the last 25 years. This curve shows the winners of globalization: those who are producing get a part of the income (e.g. the middle class in emerging economies such as China) and the very rich which take important part of the income coming from economic growth because they have a high return on capital, not because they produce. The losers are the citizens of rich countries with stagnating incomes, the population of former communist countries and also the very poor where incomes remain almost unchanged over this period. \n \n Losers: citizens in rich countries with stagnating incomes: show their dissatisfaction by their voting behaviour: election of Trump, Brexit, extreme parties getting back (Belgium: vlaams-belang) \n \n Very rich: big inequalities: the share they have is growing fast \n \n Winner: middle class in emerging economies: put more pressure on the climate: more and more people have high living standards: more pollution \n \n Losers: inequality: still living in poor conditions \n \n Most important curve of the decade: representation of the unequal distribution of income growth in the different regions of the world.

Understand the content of the graph "minimal subsistence income and maximal social inequality

In a society where average income is 3 times larger than subsistence income, the maximal share received by top 10% highest incomes (compatible with a subsistence income for the bottom 90%) is equal to 70% of total income, and the maximal share of top 1% highest incomes (compatible with a subsistence income for the bottom 99%) is equal to 67% of total income. \n \n The richer the society, the more it is feasible to reach a high inequality level.

Grasp the main points of the argumentation by Piketty

Theory of Piketty (r>g): in the future the growth on the stock market will become bigger than the real growth (so, profit made on financial market will increase) à if this occurs, it will be more interesting to invest money rather than creating something real in the economy (same prediction as the IMF and other important institutions). The basic idea of the financial market was to offer entrepreneurs a way to be financed. So, people buy on this market to finance real projects. Now, with this investment we can now speculate and make more money. The financial world is more and more disconnected with the real world: the amount of money is 9 times higher than the real amount in the world). à Financial bubble. \n \n Inequalities are the result of political and ideological choices: it is not just a characteristic of free market functioning or capitalism, it's not adjustment of offer and demand, it is the result of number of political and hence ideological choices. \n \n Piketty predicts that if the state does not intervene, inequality and the ratio capital/income will only increase on a steady pace to a very high level.

Make the link with the elephant curve of Milanovic and social and political consequences

==Social consequences==: the good part of the globalization is that some people get out of poverty which reduces inequalities (in China). But otherwise, the globalization benefits only to the very rich, while income does not change for the very poor (Africa), which deepens world inequalities. \n \n ==Political consequences== : the curve had a huge impact on several decisions like the Brexit or the election of Trump à people think they are the losers of the globalization even if they are still rich.

Reflect on the main point of the book "Capital and ideology"

==Social inequality:== social inequality is not an economic or technical necessity but largely the result of political and ideological choices. This pattern is not the result of an ex-machine patter that we cannot control. It is the result of ideological choices that were made in the past and led to the equilibrium we have today. \n \n ==Population and average national income==: During history, every time we find enough practical or technical solutions to potentially feed everyone. The average revenue per habitant and the world population grow at the same pace. When there are more people, the cake gets bigger instead of too small to feed anyone. \n \n ==Rising inequalities==: the rise in inequality is general but its extent varies greatly from country to country. The level of inequality is unevenly distributed around the world. \n \n ==The rich get richer and the poor get poorer:== when we are at the bottom, we have little moving space: the money we have from our jobs won't increase a lot and we are very dependent on what happens in politics and in real life economy. When we have more money, we can invest it in a house or even in the financial market. Then we get richer more easily

What is the Matthew effect?

those who get the most benefit of social redistribution are maybe not those who need it the most. It refers to Matthew in the Bible: "The rich will grow richer, and the poor will be poorer". Systems of redistribution are sometimes systems that are not redistribution of wealth from the rich to the poor but redistribution from the poor to the rich àthe redistribution is the advantage of wealthy people.

The role played by school is reproducing social inequality (stratification)

Social stratification manifests itself in cultural taste and leisure activities àlinked to social class positions. \n \n In Belgium, schools use a cascade system: all the students begin in the general system and if they can't follow, they first repeat a year and then usually go in professional or technical branches. But the problem is that we can see that schools with richer people have better professors and smaller classes à better results and that schools with poorer people are the opposite à more goes to professional or technical, does less studies (less paid jobs, etc.). This causes a large gap between people and create some inequalities since the beginning. \n \n There is an impact of the kind of families we come from to the likelihood of our school success but even a bigger impact of the characteristics of the school where we find ourselves. \n \n BUT it is possible to have a system where there is a high-performance level, a relatively low segregation, and a small socio-economic impact (e.g.: Switzerland or Finland). \n \n Moreover, in Belgium, schools and universities are subsided by the state and so everybody pays for them even if they don't use them which means that richer people became richer with the money of the poorer (because they paid less to get a better education and then a better job and a better salary). \[This is because richer people are more willing to do long study and go to university\]. \n \n Since we live in a meritocracy, everyone should be offered the same opportunities of education à equal education for everyone and not education based on our background.

The composition of the school is more important than the socio-economic background?

Yes, if there is a good class composition, a student with a poor socio-economic background will be pulled up by the others and a huge part of the differences will disappear. So, it is more important to do a good social mix in school than having a good background. BUT it is difficult to have a good social mix because this causes some loss for the richer

Is the composition of the school really very important? What is the school composition effect? How is it linked to inequality?

The school composition is how a class is composed (based on the social mix). \n \n Yes, the composition of the class is very important because if half of the class is in bad dispositions the level will be pulled down. But if most of the students are in good dispositions (good equipment, breakfast, enough sleep, etc.) the whole class will be pulled up. So, by mixing the schools and the students with different socio-economic backgrounds those who come from poor backgrounds win more than those from rich backgrounds lose. (The problem is that there is a loss for the rich and so people are against this idea) \n \n We can see that students with a poor background are less willing to do long study due to less good schools, they are also less pushed by their parents, ... and so they will have a less good job that will pay less. This will increase inequalities. + other impact of the education: For example, girl with better education is also less likely to get pregnant early. + less drugs use, less alcohol, ... (see all the socioeconomic inequalities) \n \n With school, people can hope to rise socially (reach a higher class than their own) by winning cultural capital.

The 3 types of capital according to Bourdieu

==Cultural capital== = education (school/degree) but also habitus (right manner) \n \n ==Economic capital== = money, land and real estate \n \n ==Social capital== = quantity, quality, and diversity of social relations/network \n \n \n your tastes and attitudes will vary according to your level of these 3. Capital is often an inheritance

Grasp how the habitus is the interiorization of social position

The habitus is the product of certain social conditions, by learning and socialization, it is a set of behaviours or habits acquired by an individual (or group). All of our habitus come from our environment, our family and their habits, our friends, we are reproducing what we see so we are interiorising our background and surrounding and so our social position. For example, children whose parents have a long education are more likely to do the same. \n \n The habitus can thus represent an automatic advantage (for the upper class) or disadvantage (lower class) of which we are not necessarily conscious. \n \n The habitus is at the origin of the different life styles.

Bourdieu argumentation about socialization and reproduction

Socialisation within the family is the first "impact" on the family. When we are baby, the only thing that we see is our family and we try to reproduce what they do à this creates our "first" habitus. Then this habitus can change due to more interaction with the rest of the world (even if we mostly stay with people from the same class as ours). \[We reproduce what we see during our socialisation.\]

What is the main point of the distinction theory of Bourdieu?

Distinction is a strategy of differentiation of a social group from another group through habitus (tastes, behaviours, judgements, classifications, ...) which aims at domination. \n \n There are three different classes: \n

==The dominant class==: aesthetic disposition, art for the stake of the art, material security \n \n ==The middle class==: wants to distinguish itself from the lower class and respect the high culture \n

Descending petite bourgeoise: losers of globalization and tend to be more conservative (shops) \n

Ascending petite bourgeoisie: they benefit from globalization and tend to be more progressive (employees and middle managers)

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New petite bourgeoisie: they often come from working class background and climbed up thanks to education or skills \n \n ==The dominated class/lower class==: intrinsic value, clear messages of emotional appeal \n \n Social stratification is a transmission between generations of social inequalities. We can understand people and their actions according to : their belonging to a class, their habitus, their cultural, economic and social capitals, their interactions and the way they distinguish from each other's. \n \n The distinction is a strategy of differentiation of a social group toward another group by the habitus which has domination as a purpose. The society is composed of fields in which each class tries to dominate by differentiating from the other. The classes are different because of their habitus and capital. The habitus are habits not only reflected in their attitude but also in their way of thinking, judging and seeing things. Three types of capital: cultural, economic and social.

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What is the idea of the sociology of Bourdieu?

We can understand and explain the actions of agents only if we see that they are members of a class, have a class habitus, may or may not possess certain capitals and find themselves in relations of domination, objective struggle and distinction with other classes. \n \n Society is composed of fields which are systems of objectively competing positions for specific capitals in a social space (issue: monopoly of legitimacy). \n \n Action is determined by the environment from which one comes. Children of dominant classes have an automatic advantage in education because they acquire cultural capital at home --> class relations are reproduced.

How can we explain the evolution of meat, vegetarian, gluten-free bread, ... since WW2?

We can explain this evolution by the will of distinction from the upper class. After the WWII, there was less meat, and it was really expensive, so eating was a huge distinction. It is the same of for vegetarianism, gluten-free bread, etc. \n \n Distinction is the strategy of differentiating a social group from other groups by the habitus (tastes, behaviors, judgments, classifications, emotions), which aims domination. So when a lower class starts to imitate the upper one, the upper one changes its habits for more new one (most of the time for more expensive ones) to keep its status.

Why focus for instance on percentiles and not just use the Gini coefficient?

The Gini coefficient only gives us the level of inequality for the country as a hole. But we have seen that there also are inequalities within countries. The Gini coefficient is good for comparing countries but for measuring poverty within a country it is betterto focus on percentiles. It gives us the percentages of wealth that each part of the population has: more precise and representative of the situation.

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Difference between relative and absolute approaches?

Absolute poverty measurements are based on indicators. For instance, the food poverty line: people not being able to consume 2000 calories a day are below the poverty line. In Europe, these types of measurement are not useful because almost everyone is over the food poverty line. A way to measure poverty is to use relative approaches: compare different parts of the society. For instance, at-risk-poverty rate: net income less than 60% of the national median. Relative approaches permit us to compare things that we can compare. For instance, a lot of people considered poor in the UK won't be considered poor in Estonia, but this does not help them because they live in the UK. \n \n Absolute approaches are good to calculate at a world level people in really bad conditions but at a country level especially in Europe it is better to use relative approaches to be coherent and to get useful information.

Causes and consequences of social inequalities?

The social inequalities are mainly due to the political choice of a country. Choosing a liberal, right wing with few state intervention and relatively low fiscal pressure will worsen inequalities. The social distribution (transfer of money for the wealthiest to the poorest) is primordial to reach a quite equal society. \n \n Consequences: in rich countries, the more unequal the country is, the more there are health and social problems such as higher infant mortality rate, more drug use, prevalence of mental illness... \n \n Matthew effect

What "sustainable development" means and why "sustainable" has been added to "development"?

Sustainable development: development considering the climate situation. So, using green energies, banning fossil fuels... \n \n Sustainable has been added because it is now clear that we won't be able to continue development as we do know it in the future. We are reaching the limit of the earth and need to find sustainable ways to continue to develop if we want to survive \n \n Development = expanding the choices people have to lead lives that they value (UN Development Program, 2001), it echoes the writing of Amartya Sen on capabilities and the notion of empowerment: it is not just about being rich, but to have the capacity to act and make choices in your life.

How is the habitus the interiorization of social norms?

The habitus is the interiorization of the social conditions; we are influenced by the social conditions that surround us and thus the social position of our family. The habit is acquired by socialization in the family; we reproduce the behaviour and thoughts of our family and that is how it makes us what we are. It explains also why people from the same social class have similar attitudes. \[Interiorization : the habitus affects our thoughts, judgement, etc.)

What is the impact of segregation in schools (separation in function of the socio-economic class)

Big inequality between schools. The schools with only low socio-economic background kids have a high turnover level of teachers, these teachers have more often a sense of futility toward education. Children with low level together: low level of the school. There is a big difference in school achievement between schools. The inequalities of society are reproduced at school. On average, mediocre results for the country. High explained variance when taking into account socio-economic position. Not a meritocratic system: important influence of your parents' level of wealth on your attainment at school. \n \n Poor student: do not always eat/sleep well, no warm clothes, education less good, difficult conditions at home, ... It is not the same as teaching in a rich school where children have all they need.

Why use an at-risk poverty rate and not the poverty line?

The use of the poverty line in Europe won't give us any interesting information. Indeed, almost everyone in Europe is above the poverty line. We need another measure that can work for each country. The at-riskpoverty rate is good because it takes into account the difference of standard of living between the countries.

Result for poverty line and at-risk-poverty for Greece and Romania?

Romania: some people are below the poverty line. Some people are food poor. \n \n Regarding the at-risk-poverty line we cannot compare the two. The fact that one is lower than the other does not mean that the country is poorer. It only means that the living standards are different. --> to compare we need to transform these by using the PPP.

Is the composition of school more important than socio-economic background?

Yes. The impact of being in a good of a bad school is much more important than being rich. This can be explained by the bad situation in poor schools: high turnover of teachers, not motivated ones, ... We see that the schools with rich kids are doing really better than the ones with poor kids: academic segregation. Moreover, the socio-economic behavior can be corrected by a good social mix (but very controversial due to the loss caused by the wealthier students)

Same at-risk-poverty rate but different poverty threshold

The at-risk-poverty rate is based on the median income of the country. It is possible that in the two countries the proportion of people being at-risk-poverty rate is the same, but the threshold(=intensity) is not the same. Because the median income is different for the two countries: explained by the difference in living standard.

Explain the socio-economic transformation during the modernization (19th century)

The transition to Modern times comes from as shift from "gemeinschaft" to "gesellschaft". \n \n ==Gemeinschaft== = community à people are very similar and know each other, they have exchangeable functions. \n \n ==Gesellschaft== = society à more division of labor and specialization, more complex interactions, larger entities, interdependence, people are not easily exchangeable.

Does sport reflect the existing differences in our society?

Yes. Even if there is a democratization of sports, social stratification remains present. Sports reflects what is needed in the job situation or the different social groups

Does sport reflect the existing differences in our society? Bourdieu

social status pyramid of sports in 1999. Differences because financial barriers (equipment, costs of the sport) and difference in tastes and lifestyles re linked to social positions. \n \n Top: sports practiced most by the richest people \n \n Bottom: sports practiced most by the lower class

Does sport reflect the existing differences in our society? Roland Rensen

Sport system in function of the class \n \n ==Upper class==: distance and fitness: no direct bodily contact \n \n ==Upper middle class==: outdoor sports, use of specific material, symbolic reflection of social values: initiative tacking, calculated risk raking, confronting obstacles, ... \n \n ==Lower middle class==: ball games, targets, nets (cooperative dimension, sport group) \n \n ==Lower class==: direct physical contact or physical effort and power, individual sports focused on pushing your physical limits

Does sport reflect the existing differences in our society? Van Rensel

Contents of sports are reflecting patterns in the social position of those who practice. Blue collar workers have more conservative sports than white collar workers. \n \n ==Blue collar workers sports (ouvriers)==: traditional, competitive, collective and highly standardized: football, athletics, gymnastics, ... \n \n ==White collar workers sports (cadres):== intensive, recreational, self-fulfillment, independence. Already preparing the reflection needed to be part of the high middle class: snowboard, surf, squash,

Is the culture also categorized?

Yes. Some cultural elements are categorized as high culture and others as low just because socially high or low groups love it. \n \n Distinction between high and low culture can change \n \n Devaluation of too popular classics (ex: Quatres Saisons de Vivaldi)

\n Reevaluation of mass culture or popular culture as new elite culture (ex: jazz)

\n Phenomenon of celebration of "bad taste" (ex: Claude François) \n \n The trickledown effect: in situation of upward social mobility lower strata try to copy higher strata (ex. antechamber) \n \n The self-selection/auto-censuring: people put themselves outside of cultural practices for social reasons à true for both high and lows strata.