Labour market institutions and income inequality
Abstract"Labour market institutions are a crucial determinant of wage inequality, the wage share in aggregate income, and the unemployment rate. Since these variables affect, in turn, the distribution of income across households, the question arises of whether stronger labour market institutions have an impact on income inequality. Institutions can in principle have conflicting effects. For example, a higher unemployment benefit tends to increase the wage share, which in turn reduces inequality, but it also increases the unemployment rate thus making the distribution of income more unequal. This paper examines what is the overall impact of labour market institutions on household income inequality. The evidence indicates that stronger institutions are associated with lower income inequality, but in some cases also with higher rates of unemployment. We explore the magnitude of this trade-off, and quantify the changes in inequality and unemployment that we would observe if a common labour standard were imposed on members of the European Union." Copyright (c) CEPR, CES, MSH, 2008.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by CEPR & CES & MSH in its journal Economic Policy.
Volume (Year): 23 (2008)
Issue (Month): (October)
Contact details of provider:
Postal: 3rd Floor, 77 Bastwick Street, London EC1V 3PZ
Phone: +44 (0)20 7183 8801
Fax: +44 (0)20 7183 8820
Web page: http://www.blackwellpublishing.com/journal.asp?ref=0266-4658
More information through EDIRC
Postal: Schackstr. 4, 80539 Munich
Phone: +49 (89) 2180-2748
Fax: +49 (89) 39 73 03
Web page: http://www.cesifo-group.de/portal/page/portal/ifoHome/f-about/f2aboutces
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Winfried Koeniger & Marco Leonardi & Luca Nunziata, 2007.
"Labor Market Institutions and Wage Inequality,"
Industrial and Labor Relations Review,
ILR Review, Cornell University, ILR School, vol. 60(3), pages 340-356, April.
- Daniele Checchi & Claudio Lucifora, 2002.
"Unions and labour market institutions in Europe,"
CEPR & CES & MSH, vol. 17(35), pages 361-408, October.
- Bentolila, Samuel & Saint-Paul, Gilles, 1998.
"Explaining Movements in the Labour Share,"
CEPR Discussion Papers
1958, C.E.P.R. Discussion Papers.
- Samuel Bentolila & Gilles Saint Paul, 1999. "Explaining movements in the labor share," Economics Working Papers 374, Department of Economics and Business, Universitat Pompeu Fabra.
- Bentollia, S. & Saint-Paul, G., 1999. "Explaining Movements in the Labor Share," Papers 9905, Centro de Estudios Monetarios Y Financieros-.
- Giuseppe Bertola & Francine D. Blau & Lawrence M. Kahn, 2001.
"Comparative Analysis of Labor Market Outcomes: Lessons for the US from International Long-Run Evidence,"
NBER Working Papers
8526, National Bureau of Economic Research, Inc.
- Bertola, Giuseppe & Blau, Francine D & Kahn, Lawrence, 2001. "Comparative Analysis of Labour Market Outcomes: Lessons for the US from International Long-Run Evidence," CEPR Discussion Papers 3023, C.E.P.R. Discussion Papers.
- Andrea Bassanini & Romain Duval, 2006.
"Employment Patterns in OECD Countries: Reassessing the Role of Policies and Institutions,"
OECD Social, Employment and Migration Working Papers
35, OECD Publishing.
- Andrea Bassanini & Romain Duval, 2006. "Employment Patterns in OECD Countries: Reassessing the Role of Policies and Institutions," OECD Economics Department Working Papers 486, OECD Publishing.
- Li, Hongyi & Squire, Lyn & Zou, Heng-fu, 1998.
"Explaining International and Intertemporal Variations in Income Inequality,"
Royal Economic Society, vol. 108(446), pages 26-43, January.
- Hongyi Li & Lyn Squire & Heng-fu Zou, 1998. "Explaining International and Intertemporal Variations in Income Inequality," CEMA Working Papers 73, China Economics and Management Academy, Central University of Finance and Economics.
- Hall, Peter A. & Soskice, David (ed.), 2001. "Varieties of Capitalism: The Institutional Foundations of Comparative Advantage," OUP Catalogue, Oxford University Press, number 9780199247752, September.
- Andrea Brandolini & Anthony B. Atkinson, 2001. "Promise and Pitfalls in the Use of "Secondary" Data-Sets: Income Inequality in OECD Countries As a Case Study," Journal of Economic Literature, American Economic Association, vol. 39(3), pages 771-799, September.
- Olivier Blanchard & Justin Wolfers, 1999.
"The Role of Shocks and Institutions in the Rise of European Unemployment: The Aggregate Evidence,"
NBER Working Papers
7282, National Bureau of Economic Research, Inc.
- Blanchard, Olivier & Wolfers, Justin, 2000. "The Role of Shocks and Institutions in the Rise of European Unemployment: The Aggregate Evidence," Economic Journal, Royal Economic Society, vol. 110(462), pages C1-33, March.
- Oaxaca, Ronald, 1973. "Male-Female Wage Differentials in Urban Labor Markets," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 14(3), pages 693-709, October.
- Bourguignon, Francois & Morrisson, Christian, 1998.
"Inequality and development: the role of dualism,"
Journal of Development Economics,
Elsevier, vol. 57(2), pages 233-257.
- Saint-Paul, Gilles, 2000. "The Political Economy of Labour Market Institutions," OUP Catalogue, Oxford University Press, number 9780198293323, September.
- Belot, Michèle & van Ours, Jan C., 2000.
"Does the Recent Success of Some OECD Countries in Lowering their Unemployment Rates Lie in the Clever Design of their Labour Market Reform?,"
IZA Discussion Papers
147, Institute for the Study of Labor (IZA).
- Michèle Belot & Jan C. van Ours, 2004. "Does the recent success of some OECD countries in lowering their unemployment rates lie in the clever design of their labor market reforms?," Oxford Economic Papers, Oxford University Press, vol. 56(4), pages 621-642, October.
- Belot, M.V.K. & Ours, J.C. van, 2000. "Does the Recent Success of some OECD Countries in Lowering their Unemployment Rates lie in the Clever Design of their Labour Market Reforms?," Discussion Paper 2000-40, Tilburg University, Center for Economic Research.
- Belot, Michèle & van Ours, Jan C, 2000. "Does the Recent Success of some OECD Countries in Lowering their Unemployment Rates lie in the Clever Design of their Labour Market Reforms?," CEPR Discussion Papers 2492, C.E.P.R. Discussion Papers.
- David Card & Thomas Lemieux & W. Craig Riddell, 2004. "Unions and Wage Inequality," Journal of Labor Research, Transaction Publishers, vol. 25(4), pages 519-562, October.
- David H. Autor & William R. Kerr & Adriana D. Kugler, 2007. "Does Employment Protection Reduce Productivity? Evidence From US States," Economic Journal, Royal Economic Society, vol. 117(521), pages 189-217, 06.
- Andrea Brandolini & Timothy M. Smeeding, 2007. "Inequality Patterns in Western-Type Democracies: Cross-Country Differences and Time Changes," CHILD Working Papers wp08_07, CHILD - Centre for Household, Income, Labour and Demographic economics - ITALY.
- Barro, Robert J, 2000. " Inequality and Growth in a Panel of Countries," Journal of Economic Growth, Springer, vol. 5(1), pages 5-32, March.
- Philipp Doerrenberg & Andreas Peichl, 2012.
"The Impact of Redistributive Policies on Inequality in OECD Countries,"
Cologne Graduate School Working Paper Series
03-05, Cologne Graduate School in Management, Economics and Social Sciences.
- Philipp Doerrenberg & Andreas Peichl, 2014. "The impact of redistributive policies on inequality in OECD countries," Applied Economics, Taylor & Francis Journals, vol. 46(17), pages 2066-2086, June.
- Doerrenberg, Philipp & Peichl, Andreas, 2012. "The Impact of Redistributive Policies on Inequality in OECD Countries," IZA Discussion Papers 6505, Institute for the Study of Labor (IZA).
- Doerrenberg, Philipp & Peichl, Andreas, 2014. "The impact of redistributive policies on inequality in OECD countries," ZEW Discussion Papers 14-012, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
- Thibault Darcillon, 2012. "Do Interactions between Finance and Labor Market Institutions Affect Wage Distribution?," Documents de travail du Centre d'Economie de la Sorbonne 12089, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
- Töngür, Ünal & Elveren, Adem Yavuz, 2014.
"Deunionization and pay inequality in OECD Countries: A panel Granger causality approach,"
Elsevier, vol. 38(C), pages 417-425.
- Unal Tongur & Adem Yavuz Elveren, 2013. "Deunionization and Pay Inequality in OECD Countries: A Panel Granger Causality Approach," ERC Working Papers 1306, ERC - Economic Research Center, Middle East Technical University, revised May 2013.
- Giuseppe Bertola, 2008.
"Labour Markets in EMU - What has changed and what needs to change,"
European Economy - Economic Papers
338, Directorate General Economic and Monetary Affairs (DG ECFIN), European Commission.
- Bertola, Giuseppe, 2008. "Labour Markets in EMU - What has Changed and What Needs to Change," CEPR Discussion Papers 7049, C.E.P.R. Discussion Papers.
- Jan Hogrefe & Marcus Kappler, 2013.
"The labour share of income: heterogeneous causes for parallel movements?,"
Journal of Economic Inequality,
Springer, vol. 11(3), pages 303-319, September.
- Hogrefe, Jan & Kappler, Marcus, 2010. "The labour share of income: Heterogeneous causes for parallel movements?," ZEW Discussion Papers 10-024, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
- Herzer, Dierk, 2014. "Unions and income inequality: a heterogenous cointegration and causality analysis," Working Paper 146/2014, Helmut Schmidt University, Hamburg.
- Elsa Orgiazzi & Paul Maarek, 2010.
"Which factor bears the cost of currency crises?,"
2010 Meeting Papers
810, Society for Economic Dynamics.
- Paul Maarek & Elsa Orgiazzi, 2011. "Which factor bears the cost of currency crises?," Economics Working Paper Archive (University of Rennes 1 & University of Caen) 201101, Center for Research in Economics and Management (CREM), University of Rennes 1, University of Caen and CNRS.
- repec:hal:journl:halshs-00768908 is not listed on IDEAS
- Cristiano Perugini & Ekaterina Selezneva, 2013. "Labour Market Institutions, Crisis and Gender Earnings Gap in Eastern Europe," Working Papers 328, Institut für Ost- und Südosteuropaforschung (Institute for East and South-East European Studies).
- Salverda, Wiemer & Checchi, Daniele, 2014. "Labour-Market Institutions and the Dispersion of Wage Earnings," IZA Discussion Papers 8220, Institute for the Study of Labor (IZA).
- Judith Niehues, 2010. "Social Spending Generosity and Income Inequality: A Dynamic Panel Approach," SOEPpapers on Multidisciplinary Panel Data Research 336, DIW Berlin, The German Socio-Economic Panel (SOEP).
- Thibault Darcillon, 2012. "Do Interactions between Finance and Labor Market Institutions Affect Wage Distribution ?," UniversitÃ© Paris1 PanthÃ©on-Sorbonne (Post-Print and Working Papers) halshs-00768908, HAL.
- Maurizio Franzini & Mario Pianta, 2011. "Explaining inequality in today’s capitalism," Working Papers 1108, University of Urbino Carlo Bo, Department of Economics, Society & Politics - Scientific Committee - L. Stefanini & G. Travaglini, revised 2011.
- Cecilia García-Peñalosa, 2010. "Income distribution, economic growth and European integration," Journal of Economic Inequality, Springer, vol. 8(3), pages 277-292, September.
- Opocher, Arrigo, 2009. "A Dual-Solovian Measure of Productivity Increase and its Early Antecedents," MPRA Paper 15541, University Library of Munich, Germany.
- Herwartz, Helmut & Niebuhr, Annekatrin, 2011. "Regional labor demand and national labor market institutions in the EU15," HWWI Research Papers 112, Hamburg Institute of International Economics (HWWI).
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.