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Working papers from the Economics Department of the OECD that cover the full range of the Department’s work including the economic situation, policy analysis and projections; fiscal policy, public expenditure and taxation; and structural issues including ageing, growth and productivity, migration, environment, human capital, housing, trade and investment, labour markets, regulatory reform, competition, health, and other issues.
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Less Income Inequality and More Growth – Are They Compatible? Part 1. Mapping Income Inequality Across the OECD
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- Peter Hoeller1, Isabelle Joumard1, Mauro Pisu1, Debra Bloch1
- Author Affiliations
- 1: OECD, France
- 10 Jan 2012
- Bibliographic information
Countries differ widely with respect to the level of labour income inequality among individuals of working age. Labour income inequality is shaped by differences in wage rates, hours worked and inactivity rates. Individual labour income inequality is the main driver of household market income inequality, with family formation as well as self-employment and capital income dispersion playing a smaller role. Household disposable income dispersion is lower in all OECD countries than household market income inequality, due to the redistributive effect of tax and transfer systems, but redistribution differs widely across countries. This paper maps income inequality for all OECD countries across various inequality dimensions and summarises them in inequality outcome diamonds. It also provides a cluster analysis that identifies groups of countries that share similar inequality patterns.
- cluster analysis, inequality, welfare, poverty
- JEL Classification:
- C38: Mathematical and Quantitative Methods / Multiple or Simultaneous Equation Models; Multiple Variables / Classification Methods; Cluster Analysis; Principal Components; Factor Models
- D30: Microeconomics / Distribution / General
- D6: Microeconomics / Welfare Economics
- D63: Microeconomics / Welfare Economics / Equity, Justice, Inequality, and Other Normative Criteria and Measurement
- E24: Macroeconomics and Monetary Economics / Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy / Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
- I24: Health, Education, and Welfare / Education and Research Institutions / Education and Inequality
- I3: Health, Education, and Welfare / Welfare, Well-Being, and Poverty