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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 2. The Distribution of Labour Income
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- Isabell Koske1, Jean-Marc Fournier1, Isabelle Wanner1
- Author Affiliations
- 1: OECD, France
- 10 Jan 2012
- Bibliographic information
This paper explores the role of macroeconomic factors and structural policies in shaping the distribution of labour income. Technological change and globalisation play at least some role in driving inequality patterns, but structural policy can also have an important influence on inequality outcomes, in particular through education and labour market policies. Drawing on empirical analysis of the links between structural policies and the distribution of labour income, the paper looks at potential policy trade-offs and complementarities with respect to the two policy objectives of lowering income inequality and raising economic growth. It concludes that many policies yield a double dividend in the sense that they contribute to achieving both goals simultaneously. This relates in particular to policies that facilitate the accumulation of human capital, that make educational achievement less dependent on personal and social circumstances, that reduce labour market dualism and that promote the labour market integration of immigrants and women.
- technological change, globalisation, education, product market regulation, labour market institutions, labour income, income inequality
- JEL Classification:
- D31: Microeconomics / Distribution / Personal Income, Wealth, and Their Distributions
- F16: International Economics / Trade / Trade and Labor Market Interactions
- G18: Financial Economics / General Financial Markets / Government Policy and Regulation
- I24: Health, Education, and Welfare / Education and Research Institutions / Education and Inequality
- J31: Labor and Demographic Economics / Wages, Compensation, and Labor Costs / Wage Level and Structure; Wage Differentials
- J58: Labor and Demographic Economics / Labor-Management Relations, Trade Unions, and Collective Bargaining / Public Policy
- J71: Labor and Demographic Economics / Labor Discrimination / Discrimination
- O33: Economic Development, Innovation, Technological Change, and Growth / Innovation; Research and Development; Technological Change; Intellectual Property Rights / Technological Change: Choices and Consequences; Diffusion Processes