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Do Labor Market Policies and Growth Fundamentals Matter for Income Inequality in OECD Countries?: Some Empirical Evidence

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  • Patrick Vanhoudt

    (International Monetary Fund)

Abstract

This paper presents an assessment of the relationship between income distribution, fundamentals affecting economic growth, and labor market policies. When this relationship is tested, the explanatory power turns out to be surprisingly high: on average, economic fundamentals explain about three-fourths of the variation in various inequality measures for the countries of the Organization for Economic Cooperation and Development (OECD). Moreover, Granger causality between accumulating economic fundamentals and inequality seems to hold.

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Bibliographic Info

Article provided by Palgrave Macmillan in its journal Staff Papers - International Monetary Fund.

Volume (Year): 44 (1997)
Issue (Month): 3 (September)
Pages: 356-373

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Handle: RePEc:pal:imfstp:v:44:y:1997:i:3:p:356-373

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  1. Galor, Oded & Tsiddon, Daniel, 1996. "Income Distribution and Growth: The Kuznets Hypothesis Revisited," Economica, London School of Economics and Political Science, London School of Economics and Political Science, vol. 63(250), pages S103-17, Suppl..
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Cited by:
  1. Isabell Koske & Jean-Marc Fournier & Isabelle Wanner, 2012. "Less Income Inequality and More Growth – Are They Compatible? Part 2. The Distribution of Labour Income," OECD Economics Department Working Papers 925, OECD Publishing.
  2. César Calderón & Rodrigo Valdés & Alberto E. Chong, 2004. "Labor Market Regulations and Income Inequality: Evidence for a Panel of Countries," IDB Publications 6683, Inter-American Development Bank.
  3. César Calderón & Alberto Chong & Rodrigo Valdés, 2004. "Normativa del mercado laboral y desigualdad del ingreso: elementos de juicio de un grupo de países," Research Department Publications, Inter-American Development Bank, Research Department 4376, Inter-American Development Bank, Research Department.
  4. Roman Arjona & Maxime Ladaique, 2003. "Mark Pearson Growth, Inequality and Social Protection," Canadian Public Policy, University of Toronto Press, University of Toronto Press, vol. 29(s1), pages 119-140, January.
  5. Roman Arjona & Maxime Ladaique & Mark Pearson, 2001. "Growth, Inequality and Social Protection," OECD Labour Market and Social Policy Occasional Papers, OECD Publishing 51, OECD Publishing.
  6. 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, American Economic Association, vol. 39(3), pages 771-799, September.
  7. Ravallion, Martin, 2000. "What can we learn about country performance from conditional comparisons across countries?," Policy Research Working Paper Series, The World Bank 2342, The World Bank.

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