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Missing links in the inclusive growth debate: Functional income distribution and labour market institutions

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  • Ignacio ÁLVAREZ
  • Maarten KEUNE
  • Jesús CRUCES
  • Jorge UXÓ

Abstract

This article examines the extent to which “inclusive growth” proposals made by various international organizations are consistent with their own objectives. The authors identify two commonly overlooked “missing links”: functional income distribution and collective bargaining coverage. Using a panel of 42 advanced countries for the period 1990–2018, they find that the first has an important influence on income inequality and the second plays a significant role in explaining increases in the wage share and reductions in income inequality. Consequently, these two factors must be fully integrated into the policy debate of international organizations if inclusive growth is to be successfully promoted.

Suggested Citation

  • Ignacio ÁLVAREZ & Maarten KEUNE & Jesús CRUCES & Jorge UXÓ, 2021. "Missing links in the inclusive growth debate: Functional income distribution and labour market institutions," International Labour Review, International Labour Organization, vol. 160(3), pages 337-362, September.
    • Handle: RePEc:bla:intlab:v:160:y:2021:i:3:p:337-362
    DOI: 10.1111/ilr.12203
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    References listed on IDEAS

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