Determining key drivers of inequality trends

In the light of increasing economic and social inequalities and regional disparities in terms of both economic and other outcomes and opportunities, research should analyse the main reasons for the increasing inequalities reported in the last decades worldwide and, thereby, identify whether this is primarily policy driven and/or the result of different factors related to globalisation and technological innovations. More specifically, research should examine whether inequality dynamics are determined by different trends:

• pre-market processes including the transfer of inequalities and resources across generations (the role of cultural capital, unequal familial and background factors, paying special attention to single-parent families with dependent children; unequal access to education and training of adequate quality and content at all levels, including early childhood education and care, digital skills training or to employment counselling)
• in-market processes (labour market dynamics and institutions including employment contracts and working conditions, capital and goods market structure; increasing relevance of superstar firms; globalized value chains, allocation of labour on a global scale, diffusion of innovation across firms)
• post-market processes (tax-benefit policies)
• other processes (public policies, tax evasion, discrimination, digital inequality, institutionalised racism, gender gap, effects of the COVID-19 pandemic, climate change, etc.)
• the dynamic interplay between different forms of inequalities across different spheres and stages of life.

Research should also identify means to attenuate the trends of increasing inequalities. Part of the reasons for the rising inequalities may come from suboptimal labour market dynamics. Research should therefore also analyse the main features and institutional set up determining effective and well-performing labour markets, also with the view to help accelerating labour market and economic convergence within Member States and across EU Member States.

Research should consider and advise on how current social, cultural, and economic transformations should be best steered, so that they are fair and socially just, and do not further increase existing inequalities or create new ones. Research should include a focus on territorial inequalities and the loss of economic weight of the middle-class and on the COVID-19 economic crisis, with its unequal distributional effects for those suffering the most. Local and regional levels seem to gain momentum, but comparative research is needed in order to understand the roles of local and regional stakeholders in the struggle with inequalities. Almost everywhere in the European Union, territorial inequalities are producing what has been recently labelled as “left-behind places” in which “mainstream” development policies fail to reverse the trends of increasing inequalities. It is therefore important to compare the capacity of local stakeholders in such declining urban and rural territories to implement innovative redevelopment policies based on a better understanding of the local assets of “left-behind places”. Finally, research may assess how the digitalisation of societies (and in particular the public sector) can contribute to reducing inequalities (e.g. reducing digital skills gap, engaging vulnerable groups in the policymaking process, more inclusive digital public services policies).