Issue Polarisation is judged to be damaging growth through human capital, fertility and demand

Summary

The strategy assesses that persistent K-shaped growth harms not only fairness but also growth itself. On the supply side, lower motivation to study and work weakens human capital formation, a point the strategy links to an IMF finding that rising inequality leads to suboptimal use of human resources. Regional gaps raise competition and childcare burdens in the capital, and workers at small firms or in non-regular jobs avoid marriage and childbirth, lowering fertility and potential growth. On the demand side, high-income households spend a smaller share of income than low-income ones, and property-driven household debt weakens consumption. How to reverse these channels is the core question behind the strategy's pledge to overcome polarisation.