LSE Institute of Global Policy
Why a More Systematic Approach to Assessing and Addressing Inequality Is Required
Abigail McKnight
Associate Director and Associate Professorial Research Fellow, CASE, LSE
Abigail McKnight

The recent focus on inequality by a number of important international bodies and organisations is a welcome development for those who have been concerned about the deep and profound divisions that exist between people around the world. However, although our knowledge and understanding of inequality has grown, there continues to be too narrow a focus.

We now know a fair amount about inequalities in income, earnings, wealth, health, life expectancy, and education. But these measures only provide a partial picture of inequality. It is true that inequalities in the financial resources that people have available are important, as are inequalities in life expectancy. Nevertheless, there is a concern that the choice of outcomes which inequality studies have focused on is somewhat arbitrary, and often has more to do with the availability of data than theoretical consideration. We argue that first, it is important to be clear about what aspects of peoples’ lives we should be concerned about.

When we assess the outcomes of people’s lives we think about the quality of their lives and their overall well-being. Attempts have been made to estimate holistic measures of well-being but from a quality of life perspective, the most common approaches are problematic. This is because, on the one hand, measures based on economic outcomes fail to consider differences in need between individuals or differences in individuals’ ability to convert these resources into valuable things they can do or be (such as going on holiday, being well-nourished, feeling physically secure, or having friends).

We now know a fair amount about inequalities in income, earnings, wealth, health, life expectancy, and education. But these measures only provide a partial picture of inequality.

On the other hand, subjective outcomes such as happiness are shaped by people’s expectations of life, and these expectations are influenced by social and cultural norms as well as upbringing. In response, the eminent economist and philosopher Amartya Sen, developed a capability approach to evaluating the quality of people’s lives in terms of a set of valuable things that people can be or do (like being physically secure, well-nourished, having self-respect, or having influence over decision-making), and the freedom they have to choose the kind of life they value.

Adopting this approach to assessing the quality of people’s lives provides a clear direction on which inequalities we should focus on. The Multidimensional Inequality Framework (MIF) is designed specifically to provide a framework for measuring and analysing these inequalities. The MIF is organised around seven key life domains: life and health; physical and legal security; education and knowledge; financial security and dignified work; comfortable, independent and secure living conditions; participation, influence and voice; and, individual, family and social life. Its focus is not simply on deprivation but on broader inequalities and it operationalises the concept that it is possible for some individuals to have ‘too much’ (for example, too much power and influence) while others don’t have enough.

Why a More Systematic Approach to Assessing and Addressing Inequality Is Required

Through the use of systematic disaggregation, the MIF can help identify a number of key types of inequality, such as gender and ethnic inequality. Using the capability approach to measure and assess inequality not only provides a comprehensive picture of inequality but leads us to develop a more complete understanding of the drivers of these inequalities and identify the most effective inequality reduction policies. For example, applying the theory to identify inequality drivers we see how social and cultural norms, particularly gender norms, have to be addressed to achieve gender equality.

We also find a number of key global drivers of inequality which cannot be tackled without international collaboration, such as the rise and power of global corporations, dominant narratives, ineffective global taxation, and climate change and environmental degradation. A systematic approach to assessing and addressing inequality, like that offered by the MIF, means that we focus on the inequalities that matter most and can develop a more comprehensive policy response, that in some case will require collaboration between countries.

About: The Multidimensional Inequality Framework was developed as part of a collaboration between academics at the London School of Economics and the School of Oriental and African Studies (SOAS), and practitioners at Oxfam. It is free to download from a dedicated website where there are additional resources designed to help adapt and apply the MIF, identify drivers, and policy solutions.

Dr Abigail McKnight is Associate Director at the Centre for Analysis of Social Exclusion (CASE), LSE. Her research interests span multidimensional inequality, low wage employment, evaluation of active labour market programmes, earnings inequality and mobility, through to the graduate labour market, household wealth inequality and household debt. She is a co-editor of two volumes published by Oxford University Press in 2014 covering the findings from a major international study of inequality across thirty countries spanning a period of thirty years Changing Inequalities in Rich Countries and Changing Inequalities and Societal Impacts in Rich Countries.