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Less Income Inequality and More Growth – Are They Compatible? Part 2. The Distribution of Labour Income

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  • Isabell Koske
  • Jean-Marc Fournier
  • Isabelle Wanner

Abstract

This paper explores the role of macroeconomic factors and structural policies in shaping the distribution of labour income. Technological change and globalisation play at least some role in driving inequality patterns, but structural policy can also have an important influence on inequality outcomes, in particular through education and labour market policies. Drawing on empirical analysis of the links between structural policies and the distribution of labour income, the paper looks at potential policy trade-offs and complementarities with respect to the two policy objectives of lowering income inequality and raising economic growth. It concludes that many policies yield a double dividend in the sense that they contribute to achieving both goals simultaneously. This relates in particular to policies that facilitate the accumulation of human capital, that make educational achievement less dependent on personal and social circumstances, that reduce labour market dualism and that promote the labour market integration of immigrants and women. Moins d'inégalités de revenu et plus de croissance – Ces deux objectifs sont-ils compatibles? : Partie 2. La répartition des revenus du travail Ce papier explore le rôle des facteurs macroéconomiques et des politiques structurelles comme déterminants de la distribution des revenus du travail. Si les mutations technologiques et la mondialisation contribuent, à tout le moins, à la formation des inégalités, les politiques publiques, en particulier l’éducation et les politiques du marché du travail, peuvent aussi avoir une influence importante. À partir de l’analyse empirique des liens entre politiques publiques et répartition des revenus du travail, ce document examine les éventuels arbitrages et complémentarités entre les deux objectifs que sont la réduction des inégalités de revenu d’une part et le relèvement de la croissance économique d’autre part. Il conclut que nombre de politiques sont doublement payantes car elles contribuent à la réalisation simultanée de ces deux objectifs. Cela vaut en particulier pour les politiques favorisant l’accumulation de capital humain, rendant le potentiel d’éducation moins tributaire de la situation personnelle et sociale, réduisant le dualisme du marché du travail et promouvant l’intégration des immigrants et des femmes sur le marché du travail.

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Paper provided by OECD Publishing in its series OECD Economics Department Working Papers with number 925.

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Date of creation: 10 Jan 2012
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Handle: RePEc:oec:ecoaaa:925-en

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Keywords: globalisation; education; product market regulation; technological change; income inequality; labour income; labour market institutions; institutions du marché du travail; revenus du travail; réglementation du marché du travail; mutations technologiques; inégalité des revenus; mondialisation; éducation;

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Cited by:
  1. Balazs Egert, 2013. "The Efficiency and Equity of the Tax and Transfer System in France," William Davidson Institute Working Papers Series wp1047, William Davidson Institute at the University of Michigan.
  2. 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.
  3. Henrik Braconier & Jenifer Ruiz-Valenzuela, 2014. "Gross Earning Inequalities in OECD Countries and Major Non-member Economies: Determinants and Future Scenarios," OECD Economics Department Working Papers 1139, OECD Publishing.
  4. Nicola Brandt, 2012. "Reducing Poverty in Chile: Cash Transfers and Better Jobs," OECD Economics Department Working Papers 951, OECD Publishing.
  5. Peter Hoeller, 2012. "Less Income Inequality and More Growth – Are they Compatible? Part 4. Top Incomes," OECD Economics Department Working Papers 927, OECD Publishing.
  6. Kaja Bonesmo Fredriksen, 2012. "Income Inequality in the European Union," OECD Economics Department Working Papers 952, OECD Publishing.
  7. 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.
  8. Oliver Denk & Robert P. Hagemann & Patrick Lenain & Valentin Somma, 2013. "Inequality and Poverty in the United States: Public Policies for Inclusive Growth," OECD Economics Department Working Papers 1052, OECD Publishing.
  9. Selim Elekdag, 2012. "Social Spending in Korea," IMF Working Papers 12/250, International Monetary Fund.
  10. Randall S. Jones & Satoshi Urasawa, 2012. "Promoting Social Cohesion in Korea," OECD Economics Department Working Papers 963, OECD Publishing.
  11. 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.
  12. Åsa Johansson & Eduardo Olaberria, 2014. "Long-term Patterns of Trade and Specialisation," OECD Economics Department Working Papers 1136, OECD Publishing.
  13. 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.
  14. Isabelle Joumard & Mauro Pisu & Debbie Bloch, 2012. "Tackling income inequality: The role of taxes and transfers," OECD Journal: Economic Studies, OECD Publishing, OECD Publishing, vol. 2012(1), pages 37-70.
  15. Randall S. Jones & Satoshi Urasawa, 2013. "Restoring Japan's Fiscal Sustainability," OECD Economics Department Working Papers 1050, OECD Publishing.

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