Introduction

In many Organisation for Economic Cooperation and Development (OECD) countries, income inequality has drifted up over the past decades. It appears that growth has not lifted all income boats to the same extent. In some countries, top incomes have captured a large share of the overall income gains, while income for others has risen only little. At the same time, poverty remains a pressing policy issue, not least because of the adverse effects of the recent economic crisis. There is growing consensus that assessments of economic performance should not only focus on income growth but also focus on the dispersion of income. The Stiglitz–Fitoussi–Sen Commission on economic and social performance, for instance, argued for such a change in perspective. Inclusiveness has also become one of the key issues for the OECD. This book provides new evidence on inequality and its determinants in OECD countries and draws out the policy issues. It builds on previous work in this area — Growing Unequal? Income Distribution and Poverty in OECD Countries (OECD, 2008) and Divided We Stand. Why Inequality Keeps Rising (OECD, 2011a).Against this background and widespread concerns that globalization and technical progress could raise inequality, this book highlights inequality trends and assesses different policy approaches to reduce labor and disposable income inequality. It also looks at the extremes of the income distribution: poverty and top incomes as well as the distribution of wealth. Finally, it investigates complementarities and trade-offs in pursuing redistribution strategies together with growth-enhancing policies. The remainder of this introductory chapter looks at the nexus between inequality, growth and well-being and reviews inequality trends prior and during the recent economic crisis.