Cost of living increases inequalities according to study
Published: Thursday, May 23rd 2024, 10:00
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According to a study, the cost of living increases inequalities in Switzerland. While the top ten percent of earners spend an average of 31 percent of their income on living costs, the study found that the ten percent of people on the lowest incomes spend an average of 82 percent.
For the study in the journal "Social Change Switzerland", the Swiss Competence Center for Social Sciences (Fors), the Bern University of Applied Sciences and the University of Bern analyzed data from three million people in Switzerland, according to a press release issued by Fors on Thursday.
Accordingly, everyday expenses and housing costs in particular contribute to an increase in inequality. Direct taxes and premium reductions partially cushion these mechanisms.
"Analyzing the cost of living is important - especially in an expensive country like Switzerland," the authors wrote in the study. However, no such study has been available for Switzerland to date.
Gini index gets higher
In order to quantify the extent to which these differences contribute to inequalities, the researchers used the so-called Gini index. This is a measure of inequality in a distribution that was developed by statistician Corrado Gini. The Gini coefficient assumes a value of 100 for absolute inequality and a value of 0 for equal distribution.
If only the income distribution in Switzerland is considered, the Gini coefficient is 31.3 points, according to the study. If the cost of living is included, this coefficient increases by 10.9 points.
For their calculations, the researchers used data from the Federal Statistical Office on the cost of living and tax data for the cantons of Aargau, Bern, Geneva, Lucerne, St. Gallen and Valais for 2015, which had been prepared accordingly for another study. According to the researchers, this enabled them to map the financial situation of around 45% of the Swiss population under the age of 65.
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