IDEAS home Printed from https://ideas.repec.org/a/eso/journl/v43y2012i4p477-495.html
   My bibliography  Save this article

Financialisation and Income Inequality in OECD Nations:1995-2007

Author

Listed:
  • BASAK KUS

    (Wesleyan University,Connecticut)

Abstract

This paper attempts to examine the link between financialisation and income inequality in advanced countries from a comparative perspective using data from 20 OECD countries over a period of 13 years (1995-2007). The initial regression results show an overall strong correlation between several of the financialisation indicators and income inequality net of conventional explanations including economic growth rate, unemployment, globalisation, left party power, social spending, union density, female participation in the labour market, and wage bargaining centralisation. The results also show that although financialisation has a positive association with income inequality in nations with strong as well as weak unions, the association is stronger in the latter.

Suggested Citation

  • Basak Kus, 2012. "Financialisation and Income Inequality in OECD Nations:1995-2007," The Economic and Social Review, Economic and Social Studies, vol. 43(4), pages 477-495.
  • Handle: RePEc:eso:journl:v:43:y:2012:i:4:p:477-495
    as

    Download full text from publisher

    File URL: https://www.esr.ie/article/view/34/26
    File Function: First version,2012
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. James Crotty, 2003. "The Neoliberal Paradox: The Impact of Destructive Product Market Competition and Impatient Finance on Nonfinancial Corporations in the Neoliberal Era," Review of Radical Political Economics, Union for Radical Political Economics, vol. 35(3), pages 271-279, September.
    2. Checchi, Daniele & Visser, Jelle & van de Werfhorst, Herman G., 2007. "Inequality and Union Membership: The Impact of Relative Earnings Position and Inequality Attitudes," IZA Discussion Papers 2691, Institute of Labor Economics (IZA).
    3. David Roodman, 2009. "How to do xtabond2: An introduction to difference and system GMM in Stata," Stata Journal, StataCorp LP, vol. 9(1), pages 86-136, March.
    4. David Metcalf & Kirstine Hansen & Andy Charlwood, 2001. "Unions and the Sword of Justice: Unions and Pay Systems, Pay Inequality, Pay Discrimination and Low Pay," National Institute Economic Review, National Institute of Economic and Social Research, vol. 176(1), pages 61-75, April.
    5. Engelbert Stockhammer, 2004. "Is there an equilibrium rate of unemployment in the long run?," Review of Political Economy, Taylor & Francis Journals, vol. 16(1), pages 59-77.
    6. David Card & Thomas Lemieux & W. Craig Riddell, 2004. "Unions and Wage Inequality," Journal of Labor Research, Transaction Publishers, vol. 25(4), pages 519-562, October.
    7. Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 87(1), pages 115-143, August.
    8. Thomas I. Palley, 2013. "Financialization: What It Is and Why It Matters," Palgrave Macmillan Books, in: Financialization, chapter 2, pages 17-40, Palgrave Macmillan.
    9. Frederick Solt, 2009. "Standardizing the World Income Inequality Database," Social Science Quarterly, Southwestern Social Science Association, vol. 90(2), pages 231-242, June.
    10. Beck , Thorsten & Demirguc-Kunt, Asli & Levine, Ross, 2009. "Financial institutions and markets across countries and over time - data and analysis," Policy Research Working Paper Series 4943, The World Bank.
    11. Pontusson, Jonas & Rueda, David & Way, Christopher R., 2002. "Comparative Political Economy of Wage Distribution: The Role of Partisanship and Labour Market Institutions," British Journal of Political Science, Cambridge University Press, vol. 32(2), pages 281-308, April.
    12. David Card, 1998. "Falling Union Membership and Rising Wage Inequality: What's the Connection?," NBER Working Papers 6520, National Bureau of Economic Research, Inc.
    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. Karsten Kohler & Alexander Guschanski & Engelbert Stockhammer, 2019. "The impact of financialisation on the wage share: a theoretical clarification and empirical test," Cambridge Journal of Economics, Oxford University Press, vol. 43(4), pages 937-974.
    2. Allen Hyde, 2018. "“Left behind?” Financialization and Income Inequality Between the Affluent, Middle Class, and the Poor," LIS Working papers 745, LIS Cross-National Data Center in Luxembourg.
    3. Dünhaupt, Petra, 2016. "Financialization and the crises of capitalism," IPE Working Papers 67/2016, Berlin School of Economics and Law, Institute for International Political Economy (IPE).
    4. Max Haller & Anja Eder & Erwin Stolz, 2016. "Ethnic Stratification and Patterns of Income Inequality Around the World: A Cross-National Comparison of 123 Countries, Based on a New Index of Historic Ethnic Exploitation," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 128(3), pages 1047-1084, September.
    5. Ron Wallace, 2017. "The Signature of Risk: Agent-based Models, Boolean Networks and Economic Vulnerability," Economic Thought, World Economics Association, vol. 6(1), pages 1-15, March.
    6. Gonçalves, Andreia & Ricardo Barradas, 2021. "Financialisation and the Portuguese private consumption:: two contradictory effects?," Brazilian Journal of Political Economy, Brazilian Journal of Political Economy (Brazil), vol. 41(1), Jan-Mar.
    7. Olivier Godechot & Paula Apascaritei & István Boza & Martin Hallsten & Lasse Henriksen & Are Hermansen & Feng Hou & Jiwook Jung & Alena Křížková & Zoltán Lippényi & Elvira Marta & Silvia Melzer & Eunm, 2021. "Size and evolution of the financial wage premium. Unpublished translation of “Ampleur et évolution dela prime salariale financière”, Regards croisés sur l'économie, 2020, 27(2): 97-109," Working Papers hal-03363171, HAL.
    8. Ewa Karwowski & Mimoza Shabani & Engelbert Stockhammer, 2016. "Financialisation: Dimensions and determinants. A cross-country study," Working Papers PKWP1619, Post Keynesian Economics Society (PKES).
    9. Bezemer, Dirk & Samarina, Anna, 2016. "Debt Shift, Financial Development and Income Inequality in Europe," Research Report 16020-GEM, University of Groningen, Research Institute SOM (Systems, Organisations and Management).
    10. Hope, David & Martelli, Angelo, 2019. "The transition to the knowledge economy, labor market institutions, and income inequality in advanced democracies," LSE Research Online Documents on Economics 100382, London School of Economics and Political Science, LSE Library.
    11. Hanna K. Szymborska, 2016. "Financial Sector T Nsformation And Income Inequality– An Empirical Analysis," "e-Finanse", University of Information Technology and Management, Institute of Financial Research and Analysis, vol. 12(2), pages 36-48, October.
    12. Jabłoński Łukasz, 2019. "Inequality in Economics: The Concept, Perception, Types, and Driving Forces," Journal of Management and Business Administration. Central Europe, Sciendo, vol. 27(1), pages 17-43, March.
    13. Hsieh, Joyce & Chen, Ting-Cih & Lin, Shu-Chin, 2019. "Financial structure, bank competition and income inequality," The North American Journal of Economics and Finance, Elsevier, vol. 48(C), pages 450-466.

    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. Töngür, Ünal & Elveren, Adem Yavuz, 2014. "Deunionization and pay inequality in OECD Countries: A panel Granger causality approach," Economic Modelling, Elsevier, vol. 38(C), pages 417-425.
    2. Manthos D. Delis & Iftekhar Hasan & Pantelis Kazakis, 2014. "Bank Regulations and Income Inequality: Empirical Evidence," Review of Finance, European Finance Association, vol. 18(5), pages 1811-1846.
    3. Glauco De Vita & Yun Luo, 2021. "Financialization, household debt and income inequality: Empirical evidence," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 26(2), pages 1917-1937, April.
    4. Dirk Bezemer & Anna Samarina, 2019. "Debt shift, financial development and income inequality," DNB Working Papers 646, Netherlands Central Bank, Research Department.
    5. Grjebine, Thomas & Szczerbowicz, Urszula & Tripier, Fabien, 2018. "Corporate debt structure and economic recoveries," European Economic Review, Elsevier, vol. 101(C), pages 77-100.
    6. Chletsos Michael & Roupakias Stelios, 2020. "The effect of military spending on income inequality: evidence from NATO countries," Empirical Economics, Springer, vol. 58(3), pages 1305-1337, March.
    7. Gründler, Klaus & Scheuermeyer, Philipp, 2015. "Income inequality, economic growth, and the effect of redistribution," W.E.P. - Würzburg Economic Papers 95, University of Würzburg, Chair for Monetary Policy and International Economics.
    8. Krieger, Tim & Meierrieks, Daniel, 2016. "Political capitalism: The interaction between income inequality, economic freedom and democracy," European Journal of Political Economy, Elsevier, vol. 45(C), pages 115-132.
    9. Suresh Babu, M. & Bhaskaran, Vandana & Venkatesh, Manasa, 2016. "Does inequality hamper long run growth? Evidence from Emerging Economies," Economic Analysis and Policy, Elsevier, vol. 52(C), pages 99-113.
    10. Deli, Yota D. & Hasan, Iftekhar, 2017. "Real effects of bank capital regulations: Global evidence," Journal of Banking & Finance, Elsevier, vol. 82(C), pages 217-228.
    11. Andreas Bergh & Irina Mirkina & Therese Nilsson, 2020. "Can social spending cushion the inequality effect of globalization?," Economics and Politics, Wiley Blackwell, vol. 32(1), pages 104-142, March.
    12. Erauskin, Iñaki & Turnovsky, Stephen J., 2019. "International financial integration and income inequality in a stochastically growing economy," Journal of International Economics, Elsevier, vol. 119(C), pages 55-74.
    13. Gnangnon, Sèna Kimm, 2019. "Financial Development and Tax Revenue in Developing Countries: Investigating the International Trade and Economic Growth Channels," EconStor Preprints 206628, ZBW - Leibniz Information Centre for Economics.
    14. Bittencourt, Manoel & Gupta, Rangan & Stander, Lardo, 2014. "Tax evasion, financial development and inflation: Theory and empirical evidence," Journal of Banking & Finance, Elsevier, vol. 41(C), pages 194-208.
    15. Farzanegan, Mohammad Reza & Witthuhn, Stefan, 2017. "Corruption and political stability: Does the youth bulge matter?," European Journal of Political Economy, Elsevier, vol. 49(C), pages 47-70.
    16. Ashraf, Badar Nadeem, 2018. "Do trade and financial openness matter for financial development? Bank-level evidence from emerging market economies," Research in International Business and Finance, Elsevier, vol. 44(C), pages 434-458.
    17. Oto-Peralías, Daniel & Romero-Ávila, Diego & Usabiaga, Carlos, 2013. "Does fiscal decentralization mitigate the adverse effects of corruption on public deficits?," European Journal of Political Economy, Elsevier, vol. 32(C), pages 205-231.
    18. Çoban, Serap & Topcu, Mert, 2013. "The nexus between financial development and energy consumption in the EU: A dynamic panel data analysis," Energy Economics, Elsevier, vol. 39(C), pages 81-88.
    19. Gründler, Klaus & Krieger, Tommy, 2016. "Democracy and growth: Evidence from a machine learning indicator," European Journal of Political Economy, Elsevier, vol. 45(S), pages 85-107.
    20. Kunieda, Takuma & Okada, Keisuke & Shibata, Akihisa, 2014. "Finance And Inequality: How Does Globalization Change Their Relationship?," Macroeconomic Dynamics, Cambridge University Press, vol. 18(5), pages 1091-1128, July.

    More about this item

    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:eso:journl:v:43:y:2012:i:4:p:477-495. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: https://www.esr.ie .

    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: Martina Lawless (email available below). General contact details of provider: https://www.esr.ie .

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.