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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Trends in Wage Inequality, Economic Globalisation and Labour Market Policies and Institutions

This chapter affords an overview of longer-term and recent trends in wage inequality, examines developments in various aspects of economic globalisation and technological change, and looks at changes in product and labour market regulations and policies. It also supplies empirical evidence as to the association between, on the one hand, changes over time in wage inequality and, on the other, growing globalisation, technological progress and developments in policies.

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