Missing the Story: The OECD's Analysis of Inequality
AbstractThe OECD recently published a lengthy volume examining the causes of rising inequality in most wealthy countries over the last three decades. This paper examines that study, finding that the OECD misses most of the story of inequality because its primary focus is the ratio of the annual wage of the 90th percentile worker to the 10th percentile worker, while most of the benefits of rising inequality were concentrated much further up the income ladder. In contrast to the OECD, this paper finds that the impact of technology is negligible and actually trivially negative over the period examined. It also finds many errors in the use of data in the OECD’s study, most importantly by exaggerating the number of independent observations when many of the data points are simply extrapolations. This causes the OECD to exaggerate the statistical significance of its findings. Finally, this paper suggests that the growth of the financial sector may have been an important factor contributing to the growth in inequality over the past 30 years.
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Bibliographic InfoPaper provided by Center for Economic and Policy Research (CEPR) in its series CEPR Reports and Issue Briefs with number 2012-19.
Length: 20 pages
Date of creation: Jul 2012
Date of revision:
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inequality; financial services;
Find related papers by JEL classification:
- D - Microeconomics
- D6 - Microeconomics - - Welfare Economics
- D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
- D3 - Microeconomics - - Distribution
- D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
- O - Economic Development, Technological Change, and Growth
- O3 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights
- O33 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
- G - Financial Economics
- G2 - Financial Economics - - Financial Institutions and Services
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- David Rosnick, 2013. "Gains from Trade? The Net Effect of the Trans-Pacific Partnership Agreement on U.S. Wages," CEPR Reports and Issue Briefs 2013-14, Center for Economic and Policy Research (CEPR).
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