IDEAS home Printed from https://ideas.repec.org/a/wsi/serxxx/v59y2014i01ns0217590814500015.html
   My bibliography  Save this article

Reducing Income Inequality While Boosting Economic Growth: Can It Be Done? Evidence From Oecd Countries

Author

Listed:
  • PETER HOELLER

    (Organisation for Economic Co-operation and Development (OECD), OECD, 2, rue André Pascal, 75775 Paris CEDEX 16, France)

  • ISABELLE JOUMARD

    (Organisation for Economic Co-operation and Development (OECD), OECD, 2, rue André Pascal, 75775 Paris CEDEX 16, France)

  • ISABELL KOSKE

    (Organisation for Economic Co-operation and Development (OECD), OECD, 2, rue André Pascal, 75775 Paris CEDEX 16, France)

Abstract

This paper identifies inequality patterns across Organisation for Economic Co-operation and Development (OECD) countries and provides new analysis of their policy and non-policy drivers. One key finding is that education and anti-discrimination policies, well-designed labor market institutions and large and/or progressive tax and transfer systems can all reduce income inequality. On this basis, the paper identifies several policy reforms that could yield a double dividend in terms of boosting GDP per capita and reducing income inequality, and also flags other policy areas where reforms would entail a trade-off between both objectives.

Suggested Citation

  • Peter Hoeller & Isabelle Joumard & Isabell Koske, 2014. "Reducing Income Inequality While Boosting Economic Growth: Can It Be Done? Evidence From Oecd Countries," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 59(01), pages 1-22.
    • Handle: RePEc:wsi:serxxx:v:59:y:2014:i:01:n:s0217590814500015
    DOI: 10.1142/S0217590814500015
    as

    Download full text from publisher

    File URL: http://www.worldscientific.com/doi/abs/10.1142/S0217590814500015
    Download Restriction: Access to full text is restricted to subscribers
    File URL: https://libkey.io/10.1142/S0217590814500015?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Thomas Piketty, 2011. "On the Long-Run Evolution of Inheritance: France 1820--2050," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 126(3), pages 1071-1131.
    2. Peter Hoeller, 2012. "Less Income Inequality and More Growth – Are they Compatible? Part 4. Top Incomes," OECD Economics Department Working Papers 927, OECD Publishing.
    3. Neumark, David & Wascher, William L., 2007. "Minimum Wages and Employment," Foundations and Trends(R) in Microeconomics, now publishers, vol. 3(1–2), pages 1-182, March.
    4. Jean-Marc Fournier & Isabell Koske, 2012. "Less Income Inequality and More Growth – Are they Compatible? Part 7. The Drivers of Labour Earnings Inequality – An Analysis Based on Conditional and Unconditional Quantile Regressions," OECD Economics Department Working Papers 930, OECD Publishing.
    5. Isabell Koske & Jean-Marc Fournier & Isabelle Wanner, 2014. "The Distribution Of Labor Income," World Scientific Book Chapters, in: Peter Hoeller & Isabelle Joumard & Isabell Koske (ed.), Income Inequality in OECD Countries What are the Drivers and Policy Options?, chapter 3, pages 43-84, World Scientific Publishing Co. Pte. Ltd..
    6. Thomas Dalsgaard, 2000. "The Tax System in Mexico: A Need for Strengthening the Revenue-Raising Capacity," OECD Economics Department Working Papers 233, OECD Publishing.
    7. Orsetta Causa & Sébastien Jean, 2007. "Integration of Immigrants in OECD Countries: Do Policies Matter?," OECD Economics Department Working Papers 564, OECD Publishing.
    8. Romain Bouis & Romain Duval, 2011. "Raising Potential Growth After the Crisis: A Quantitative Assessment of the Potential Gains from Various Structural Reforms in the OECD Area and Beyond," OECD Economics Department Working Papers 835, OECD Publishing.
    9. 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.
    10. Kaja Bonesmo Fredriksen, 2012. "Less Income Inequality and More Growth – Are they Compatible? Part 6. The Distribution of Wealth," OECD Economics Department Working Papers 929, OECD Publishing.
    11. Mauro Pisu, 2012. "Less Income Inequality and More Growth – Are they Compatible? Part 5. Poverty in OECD Countries," OECD Economics Department Working Papers 928, OECD Publishing.
    12. 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.
    13. Paul Conway & Donato de Rosa & Giuseppe Nicoletti & Faye Steiner, 2006. "Regulation, Competition and Productivity Convergence," OECD Economics Department Working Papers 509, OECD Publishing.
    14. Åsa Johansson & Chistopher Heady & Jens Matthias Arnold & Bert Brys & Laura Vartia, 2008. "Taxation and Economic Growth," OECD Economics Department Working Papers 620, OECD Publishing.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Baloch, Amdadullah & Mohd Noor, Zaleha & Habibullah, Muzafar & ,, 2018. "The Effect of the Gender Equality on Income Inequality: A Dynamic Panel Approach," Jurnal Ekonomi Malaysia, Faculty of Economics and Business, Universiti Kebangsaan Malaysia, vol. 52(2), pages 3-17.
    2. Young Eun Kim & Norman V. Loayza, 2019. "Productivity Growth: Patterns and Determinants across the World," Revista Economía, Fondo Editorial - Pontificia Universidad Católica del Perú, vol. 42(84), pages 36-93.
    3. Maqbool H. Sial & Ghulam Sarwar & Mubashra Saeed, 2019. "Surplus Education and Earnings Differentials in Pakistan: A Quantile Regression Analysis," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 24(2), pages 93-114, July-Dec.
    4. Roberta MONTEBELLO & Jonathan SPITERI & Philip VON BROCKDORFF, 2023. "Trade unions and income inequality: Evidence from a panel of European countries," International Labour Review, International Labour Organization, vol. 162(3), pages 481-503, September.
    5. Topcu, Mert & Tugcu, Can Tansel, 2020. "The impact of renewable energy consumption on income inequality: Evidence from developed countries," Renewable Energy, Elsevier, vol. 151(C), pages 1134-1140.
    6. Vanesa Jorda & Jose M. Alonso, 2020. "What works to mitigate and reduce relative (and absolute) inequality?: A systematic review," WIDER Working Paper Series wp-2020-152, World Institute for Development Economic Research (UNU-WIDER).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    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. Isabelle Joumard & Mauro Pisu & Debra Bloch, 2012. "Less Income Inequality and More Growth – Are They Compatible? Part 3. Income Redistribution via Taxes and Transfers Across OECD Countries," OECD Economics Department Working Papers 926, OECD Publishing.
    3. Isabelle Joumard & Mauro Pisu & Debbie Bloch, 2012. "Tackling income inequality: The role of taxes and transfers," OECD Journal: Economic Studies, OECD Publishing, vol. 2012(1), pages 37-70.
    4. Rafal Kierzenkowski & Isabell Koske, 2012. "Less Income Inequality and More Growth – Are they Compatible? Part 8. The Drivers of Labour Income Inequality – A Literature Review," OECD Economics Department Working Papers 931, OECD Publishing.
    5. Rafal Kierzenkowski & Isabell Koske, 2013. "The Drivers Of Labor Income Inequality — A Literature Review," Journal of International Commerce, Economics and Policy (JICEP), World Scientific Publishing Co. Pte. Ltd., vol. 4(01), pages 1-32.
    6. Robert P. Hagemann, 2012. "Fiscal Consolidation: Part 6. What Are the Best Policy Instruments for Fiscal Consolidation?," OECD Economics Department Working Papers 937, OECD Publishing.
    7. Eduardo Olaberría, 2016. "Bringing all Chileans on board," OECD Economics Department Working Papers 1289, OECD Publishing.
    8. Orsetta Causa & Alain de Serres & Nicolas Ruiz, 2015. "Can pro-growth policies lift all boats?: An analysis based on household disposable income," OECD Journal: Economic Studies, OECD Publishing, vol. 2015(1), pages 227-268.
    9. Peter Hoeller & Isabelle Joumard & Mauro Pisu & Debra Bloch, 2012. "Less Income Inequality and More Growth – Are They Compatible? Part 1. Mapping Income Inequality Across the OECD," OECD Economics Department Working Papers 924, OECD Publishing.
    10. Åsa Johansson, 2016. "Public Finance, Economic Growth and Inequality: A Survey of the Evidence," OECD Economics Department Working Papers 1346, OECD Publishing.
    11. Sebastian Barnes & Romain Bouis & Philippe Briard & Sean Dougherty & Mehmet Eris, 2013. "The GDP Impact of Reform: A Simple Simulation Framework," OECD Economics Department Working Papers 834, OECD Publishing.
    12. Isabelle Joumard & Juliana Londoño Vélez, 2013. "Income Inequality and Poverty in Colombia - Part 1. The Role of the Labour Market," OECD Economics Department Working Papers 1036, OECD Publishing.
    13. Douglas Sutherland & Peter Hoeller, 2014. "Growth Policies and Macroeconomic Stability," OECD Economic Policy Papers 8, OECD Publishing.
    14. Łukasz Rawdanowicz & Eckhard Wurzel & Ane Kathrine Christensen, 2013. "The Equity Implications of Fiscal Consolidation," OECD Economics Department Working Papers 1013, OECD Publishing.
    15. Simone Salotti & Carmine Trecroci, 2018. "Cross-country evidence on the distributional impact of fiscal policy," Applied Economics, Taylor & Francis Journals, vol. 50(51), pages 5521-5542, November.
    16. Johan E. Eklund & Emma Lappi, 2018. "Product regulations and persistence of profits: OECD evidence," Journal of Regulatory Economics, Springer, vol. 54(2), pages 147-164, October.
    17. Margit Schratzenstaller, 2013. "Besteuerung höherer Einkommen und Vermögen: internationale Entwicklungstendenzen, Möglichkeiten und Grenzen," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 82(1), pages 13-34.
    18. Douglas Sutherland & Peter Hoeller, 2013. "Growth-promoting Policies and Macroeconomic Stability," OECD Economics Department Working Papers 1091, OECD Publishing.
    19. Ghosh, sudeshna, 2017. "Education Attainment Forecasting and Economic Inequality United States," MPRA Paper 89712, University Library of Munich, Germany.
    20. Jean-Marc Fournier & Isabell Koske, 2012. "The determinants of earnings inequality: evidence from quantile regressions," OECD Journal: Economic Studies, OECD Publishing, vol. 2012(1), pages 7-36.

    More about this item

    Keywords

    Income inequality; tax and transfer systems; education policy; labor market policy; JEL Classification: D31; JEL Classification: H23; JEL Classification: H53; JEL Classification: I24; JEL Classification: J68;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wsi:serxxx:v:59:y:2014:i:01:n:s0217590814500015. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Tai Tone Lim (email available below). General contact details of provider: http://www.worldscinet.com/ser/ser.shtml .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.