Income differences in the Netherlands: it’s not as equal here as you might think
Egbert Jongen researches income inequality in the Netherlands. Where are the differences and what can we do about them? This Professor of Economics and Socioeconomic Policy will explain more in his inaugural lecture on 1 July. ‘We can learn from countries with less difference between men and women and between people with and without a migration background.’
What will you discuss in your inaugural lecture?
‘I’ll discuss income differences between groups in the Netherlands. For long, it was thought that income inequality was not such a hot topic in the Netherlands. I too thought things were fine here. But from studies we have carried out in recent years, we can see there are actually large differences, particularly if you look at certain sub-groups.
‘In the past decades women have started working and earning more but in the mid-2000s the decrease in the ‘child penalty’ stalled: when women have a child, their income still drops sharply. I will also talk about research on people with a migration background. More people have come to the Netherlands and on average their income is low. These differences remain for the most part for their children, especially if their parents come from outside Europe.’
Where does your fascination with income disparity come from?
‘Like in many families, my father was the breadwinner. My mother was not allowed to go to university whereas her brothers were. She was active in the women’s rights movement so from a young age I heard a lot about gender differences. At primary school in the relatively rich Hengelo, I had friends with swimming pools in the garden whereas at secondary school in Enschede I made friends from poorer families. Later, when I started work at the Netherlands Bureau for Economic Policy Analysis (CPB) in The Hague and cycled to work through the Schilderswijk neighbourhood and the well-to-do neighbourhoods in The Hague, I was amazed at the differences between rich and poor.’
What needs to change to reduce income inequality?
‘Sadly, there is no simple answer; otherwise we would have implemented it long ago. I do have an idea that needs to be explored more. We recently, both in the Netherlands and with an international group of researchers, created a dataset containing income and labour market data from the past 50 years. This means we can compare the Dutch data with that of other countries and learn from one another.
‘In Sweden, the income differences between children who do and do not come from a migrant background are relatively small, despite a diverse group of migrants settling there too. And in Slovenia, where I lived with my family, the income distribution between men and women is more equal. They have high-quality affordable child care that is accessible to all children. That makes it easy for parents to work and fosters the development of children from disadvantaged backgrounds. You see that later in their school results and earnings.’
What are you going to spend the next few years researching?
‘I am going to continue looking at why low incomes remain low and do not increase along with middle and high incomes. Then I will consider what exactly is effective policy. What would be the result, for example, if we increased the minimum wage or helped people invest in training and education? How can we ensure that the child penalty for mothers starts decreasing again?
‘I’d like to try and solve this puzzle with my colleagues and the Statistics Netherlands (CBS) data and comparable data from abroad, because things do need to change. If policies remain the same, the income disparity between rich and poor will increase even more and the differences according to gender and migration background will hardly decrease at all. I am hopeful that things can change.’
Text: Thessa Lageman