Divided We Stand
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Divided We Stand

Why Inequality Keeps Rising

In the three decades to the recent economic downturn, wage gaps widened and household income inequality  as measured by GINI increased in a large majority of OECD countries. This occurred even when countries were going through a period of sustained economic and employment growth. This report analyses the major underlying forces behind these developments. It examines to which extent economic globalisation, skill-biased technological progress and institutional and regulatory reforms have had an impact on the distribution of earnings. The report further provides evidence of how changes in family formation and household structures have altered household earnings and income inequality. And it documents how tax and benefit systems have changed in the ways they redistribute household incomes. The report discusses which policies are most promising to counter increases in inequalities and how the policy mix can be adjusted when public budgets are under strain.

"Analyses rely on simple statistical techniques that are accessible to a large readership... the graphic and charts are of great help to gain a quick visual grasp of the various issues addressed."

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    http://oecd.metastore.ingenta.com/content/8111111e.pdf
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Publication Date :
05 Dec 2011
DOI :
10.1787/9789264119536-en
 
Chapter
 

An Overview of Growing Income Inequalities in OECD Countries

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Author(s):
OECD
Pages :
21–45
DOI :
10.1787/9789264119536-3-en

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This overview summarises the key findings of the analytical chapters of this report. It sketches a brief portrait of increasing income inequality in OECD countries and the potential driving forces behind it. It reviews changes in these driving forces and examines their relative impact on inequality. In particular, it looks at the role of globalisation and technological changes, regulatory reforms in labour and product markets, changing household structures, and changes in tax and benefit regulations. It assesses what governments can do about increasing inequality and concludes by examining possible specific policy avenues.
Also available in: French