Bridging the Gap: Inclusive Growth 2017 Update Report

Global economic integration has been a source of prosperity for many years, but is coming under
growing political pressure partly due to uneven sharing of the benefits of growth. It is perceived as one
of the causes of increased inequalities and a source of disempowerment for individuals and
communities. The OECD has long highlighted the necessity of rethinking the traditional model of
economic growth to put people’s well-being centre-stage and has launched the Inclusive Growth Initiative
in 2012 to develop a strategic policy agenda for feeding this new vision of growth. The OECD efforts on
the Inclusive Growth agenda have culminated in the 2016 Ministerial Council Meeting Declaration on
Enhancing Productivity for Inclusive Growth. The Declaration highlighted that an effective response to
address the twin challenge of fostering productivity growth and reducing inequalities requires leveraging
on technological advances and innovation to boost economies and ensure that higher productivity
growth translates into broadly shared gains in well-being. This report provides an update of the OECD
activities undertaken in response to the Declaration, building on major OECD flagships such as Going for
Growth 2017, Tax and Inclusive Growth, updates of the Divided We Stand analysis and various other
OECD pieces.
Over the last couple of decades, inequalities of income have risen or remained stubbornly high in
various OECD countries as did wealth and well-being inequalities, although these general trends mask
great disparities across countries and regions. Over the past two decades, income inequality has
widened or plateaued at a high level in several OECD countries, often with large regional discrepancies, as
richer households have pulled away from their middle and lower income peers. The trend is more mixed
for emerging economies, though the absolute levels of inequality remain much higher than in OECD
countries. Wealth is significantly more unequally distributed than income in countries where comparable
information is available. In addition, since the crisis, multidimensional living standards of the poorest
households have trailed behind, with those in the middle faring a little better, whilst those at the top
have seen substantial improvements.

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