D08 - Redistribution and Pre-Distribution: The Politics of Inequality in Canada and Beyond
Date: Jun 5 | Time: 08:45am to 10:15am | Location: SWING 205
Chair/Président/Présidente : Rianne Mahon (Wilfrid Laurier University)
Discussant/Commentateur/Commentatrice : Keith Banting (Queen's University)
Session Abstract: This panel addresses three themes of the income inequality research agenda: public opinion about inequality, welfare states and redistribution as well as the determinants wage distribution. From a comparative perspective, social policies in Canada are not particularly generous and fail to counterbalance rising inequality. However, Quebec’s welfare state achieves the highest level of redistribution in Canada. Pierre-Marc Daigneault, Daniel Béland and Lisa Birch argue that this distinct policy model reflects an ideational construction of social problems shaped by nationalism, unionism and feminist activism. The second paper also deals with social policies in Canadian provinces. Alain Noël analyzes the political and fiscal determinants of the policies of minimum income protection, a telling indicator of a provincial government’s commitment to reduce inequality. The research on inequality focuses on redistribution, although redistribution is not the only tool at government’s disposal to equalize income. To fill this void, a new research agenda has emerged and analyzes the “pre-distribution” of income before government taxes and transfers. Beginning with the observation that market income distribution is more egalitarian than expected in Canada, Olivier Jacques identify the determinants of market income inequality by analyzing the impact of expenditures composition on inequality in Canadian provinces. What are voters’ reaction to rising inequality? Why aren’t they demanding more redistributive policies? Hicks and colleagues and his colleagues tackle this fundamental political science question by analyzing the role of the media. Using an extensive dataset, they argue that economic news is not presenting accurately the inegalitarian consequences of recent economic transformations,
Fiscal Federalism in an Aging Society: Provincial Public Finances in a Context of Rising Health Care Expenditures: Olivier Jacques (McGill University)
Abstract: Canadian provinces’ public finances are sitting on a time bomb: aging and cost inflation increase overall health expenditures which are projected to represent more than 65% of provincial expenditures in the medium term. Rising health-care expenditures are likely to crowd out other programs provided by provincial governments. This article analyzes the impact of fiscal pressures on expenditure prioritization in Canadian provinces. Which type of expenditures are more likely to be cutback when governments face fiscal pressures? Secondly, this article analyses the impact of this prioritization of expenditures on income distribution. This chapter proceeds to a quantitative analysis of fiscal policy choices in the ten Canadian provinces from 1980 to 2015. It uses compositional dependent variable analysis, a method specifically designed to analyze the impact of an exogenous variable on expenditure composition and uses fixed effects models to analyze the impact of changes in the composition of expenditures on income inequality. The preliminary analyzes show that when provincial revenues are retrenched, the proportion of health care expenditures increases, but the proportion of education and infrastructure investment does not go down. In fact, the analysis reveals that other expenditures, like the justice system, public safety, the bureaucracy, culture, employment and environmental protection are retrenched when provinces face fiscal pressures. This finding contributes to a reflection about the future of Canadian federalism: as provinces face rising health care expenditures, their capacity to provide policies in other areas than education, health and roads will be impeded.
Is Quebec’s Welfare Regime Really “Distinct” and if so, Why?: Pierre-Marc Daigneault (Université Laval), Daniel Béland (McGill University), Lisa-Maureen Birch (Université Laval)
Abstract: Many social policy scholars have argued that Quebec has a distinct welfare state/social model when compared to the rest of Canada (e.g., Vaillancourt, 2012; Van den Berg et al., 2017) and have proposed various explanations of this distinctiveness such as nationalism (e.g., Béland & Lecours, 2006) or the strength of the political left and social unions (e.g., Haddow, 2004). We will explore alternative theoretical and empirical explanations regarding the layering of nationalism, unionism and feminist activism in Quebec in the ideational construction of social problems and policy solutions (see Béland, 2009; Trudel, 2009). In this paper, we review and take stock of this diverse theoretical and empirical literature to assess if there is a strong case for the existence of a distinctive Quebec welfare state and for the hypotheses regarding its development. Moreover, using Esping-Andersen’s (1990) typology of welfare regimes, we assess whether Quebec belongs to the liberal, conservative-corporatist or social democratic type.
Whose News? Economic Reporting and the Distribution of Gains and Losses: Timothy Hicks (University College London), Alan Jacobs (University of British Columbia), Scott Matthews (Memorial University of Newfoundland), Eric Merkley (University of the British Columbia)
Abstract: There is considerable evidence that citizens' choices at the ballot box are shaped by their assessments of the state of the economy. We also know that economic perceptions are considerably influenced by the news. What we know much less about is how the nature of economic news responds to different components of the economy -- and, specifically whose economic welfare drives economic news. In particular, how responsive is economic news to developments shaping the material fortunes of the rich, the broad middle, or the poor? In this paper, we analyze a massive dataset of economic news content over the last three decades in the United States to examine how the tone of economic news responds to real economic developments with differing distributional consequences. The study draws on the automated coding of sentiment in over 240,000 economic news stories from 32 high-circulation newspapers between 1980 and 2014. The analysis reveals a strong and pervasive “pro-rich" bias in economic reporting, a skew that affects liberal- as well as conservative-leaning papers and outlets with lower-income audiences. The results shed new light on the media's role as a transmission belt of economic information and help explain why mass democracy and electoral competition fail to prevent a rising concentration of resources in the hands of a small minority of the population.
The Politics of Minimum Income Protection in the Canadian Provinces: Alain Noël (Université de Montréal)
Abstract: Minimum income protection (MIP) determines the disposable income a person obtains when she has no market or social insurance income, few assets and no family support. In Canada, this last-recourse income corresponds to what the Caledon Institute of Social Policy, and now Maytree, call provincial welfare incomes. Because it defines what in practice is an absolute social protection floor, MIP constitutes a telling indicator of a provincial government’s commitment to reduce inequality and foster social justice, and it provides a strong insight into the politics of redistribution in the Canadian provinces. Expanding on a comparative model first developed to compare OECD countries (Noël, 2018a and 2018b), the proposed paper assesses the economic, institutional and political determinants of welfare incomes in the ten Canadian provinces for the 1990-2016 period, with a time-series cross-sectional model applied to the four household types documented by Maytree. The level of public social expenditures, the importance of public debt as a percentage of gross domestic product, the cumulative power of the left and of the right, and the strength of the trade union movement should all play a role, along with the structure of federal transfers to the provinces.