A/HRC/31/60 more likely to cut social spending during crises.79 The Great Recession, for example, has led to broad and deep cuts in social security spending.80 49. As to debt crises, it is challenging to disentangle the specific effects of default from those of the stabilization policies, such as those that tend to follow IMF interventions in developing countries. What seems clear is that IMF programmes are associated with a worsening of income distribution and a reduction in the incomes of the poorest citizens when external imbalances were high prior to the programme. These programmes may only decrease income inequality when external imbalances are less severe. 81 50. Dynamics of inequalities in Latin America in the 1980s offer good insights into the potential distributive impact of debt crises. A study on this region during that decade provided strong evidence confirming that income inequality “mirrors the economic cycle, rising during recessions”.82 The costs of the crises have not been borne equally 83 and most adjustment programmes resulted in “overkill” leading to increases in poverty and inequality beyond what was necessary (and legal). 84 6. Social impact of financial crises 51. Financial crises and the austerity measures adopted in response also have a robust negative social impact that, in turn, perpetuates or exacerbates inequality. The organization Caritas has summarized that the situation of many households in Europe “remains serious, as poverty and social exclusion are rising in most member States, affecting particularly the working age population and, consequently, children. Young people are seriously affected by labour market exclusion: nearly a quarter of economically active young people in the European Union are unemployed”.85 In a study, OECD notes that “the numbers living in households without any income from work have doubled in Greece, Ireland and Spain. Low-income groups have been hit hardest, as have young people and families with children”.86 The study also points out the adverse long-term impact of the Great Recession on families, fertility and health. Drops in fertility rates have already been observed. Families have cut back essential spending, compromising their current and future wellbeing. Furthermore, although it is too early to assess the overall impact on health, unemployment and connected economic difficulties are known to increase health problems, including mental illness. Cutbacks in social protection are also likely to increase health problems. As an illustration, Oxfam reports that 20 per cent of pharmacy clients in Lisbon 79 80 81 82 83 84 85 86 16 See M. Lewis and M. Verhoeven , “Financial crises and social spending: the impact of the 2008-2009 crisis”, Other Operational Studies No. 12965 (Washington, D.C., World Bank, 2010). See F. Bonnet, E. Ehmke and K. Hagemejer, “Social security in times of crisis” International Social Security Review, vol. 63, No. 2 (2010), pp. 47-70, at. 48. See M. Pastor, “The effects of IMF programs in the third world: debate and evidence from Latin America”, World Development, vol. 15, No. 2 (1987), pp. 249-262; and G. Garuda, “The distributional effects of IMF programs: a cross-country analysis”, World Development, vol. 28 No.6 (2000), pp. 1031-1051. See G. Psacharopoulos et al, “Poverty and income inequality in Latin America during the 1980s”, Review of Income and Wealth, vol. 41 No. 3 (1995), pp. 245-264. See N. Lustig, “The 1982 debt crisis, Chiapas, NAFTA, and Mexico’s poor”, Challenge, pp. 45-50 (1995). See L. Gasparini and A. L. Lustig, “The rise and fall of income inequality in Latin America”, working paper of the Center for Distributive, Labor and Social Studies (2011). “Poverty and inequality on the rise”, Caritas crisis monitoring report 2015, p. 29. See OECD, Society at a Glance 2014: OECD Social Indicators (Paris, 2014), available from http://dx.doi.org/10.1787/soc_glance-2014-en.