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54 | Zsófia Kollányi
the third section) was created, with indicators that are similar to, or partly
overlap with the one we use here.'
Obviously, there is a trade-off between the clarity and the totality of
information. The more data points are presented, the more accurate the
picture becomes. At the same time, the increasing amounts of data will also
make the information we gain more overwhelming. The disparities we find
between individual Member States are potentially enormous, which may
offset at the EU level. Also, intertemporal trends can be different not only
in scope but also in their long-term trajectory, which may shift over time.
As a compromise, I decided to present data at the country level (wherever
that was possible) and at different points in time. Another problem is the
actual measurement of socio-economic welfare and its distribution. Different
ways of measuring shed light on different aspects of welfare and inequalities.
Although these are all valid, they could potentially be telling different stories.
In the following, I present a handful of such basic measures, aiming to clarify
how they are different and why they are significant.
We can start with a relative measure of inequality: the income quintile
share ratio, or S80/S20 ratio. This captures the difference between the share
of total income earned by the bottom quintiles of the population compared
with the top quintile, that is, the respective earning levels of the one-fifth of
the population with the lowest and the one-fifth with the highest incomes.
If this measure is, say, four, then that number means that on the whole, the
richest (in terms of income) fifth of the population earn four times as much
in total income than the poorest (for example, if the aggregate income of the
poorest is 10 per cent of all income in society, then the richest make 40 per
cent of all income).
It is important to point out that this is a relative measure, which means that
if there is an absolute change in the income of these groups but no proportional
shift, then these figures will not change either. For example, if previously the
bottom group earned 10 units, and the top earned 40 units, and the earnings
of each grouped doubled to 20 and 80 units respectively, the S80/S20 will
not change, even as the absolute gap between the income of the two groups
* The headline indicators of the Social Scoreboard fall into three dimensions. Under “Equal
opportunities’, the headline indicators are: early leavers in education; share of people with
digital skills; share of NEET (Not in Employment, Education or Training) young people;
gender employment gap; and income inequality based on quintile share ration (S80/S20).
The headline indicators of the category of “Fair working conditions” are: employment
rate; unemployment rate; long-term unemployment rate; real gross disposable income of
households; and per capita increase. The headline indicators under the “Social protection
and inclusion” dimension are AROPE (at-risk-of-poverty or social exclusion rate, which is
based on relative income poverty, the rate of severe material deprivation, and the share of
people living in households with low work intensity) for the total population, and AROPE
for children; the impact of social transfers on poverty reduction; disability employment
gap; housing cost overburden; share of fewer than three children in childcare; and self¬
reported unmet needs for medical care (Eurostat 20211).