1887

Divided We Stand

Why Inequality Keeps Rising

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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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The Distributive Impact of Publicly Provided Services

This chapter examines how the income distribution in countries changes when it includes the value of publicly provided services in disposable household income. The chapter considers five types of public services, which it begins by overviewing and defining. It provides estimates for the income-increasing effect for households of inkind benefits from public services. The chapter goes on to look at the empirical results for the services' overall distributive effects. It then does the same for the five major services taken separately. Finally, before drawing its conclusions, the chapter explores whether and how the redistributive effect of services changed between the early and late 2000s.

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