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Structural reforms and income distribution: new evidence for OECD countries

Author

Listed:
  • Rasmus Wiese
  • João Tovar Jalles
  • Jakob de Haan

Abstract

This article examines the impact of labour market and product market reforms on income inequality for 25 OECD countries between 1970 and 2020, using the local projections approach and an updated narrative-based dataset of the reform indicators. Our results suggest that both types of (endogenized) market-oriented reforms increase income inequality, but the effects are small. Consistent with this finding is that counter-reforms lead to less income inequality. Our results also indicate that the inequality-increasing effect of market-oriented reforms is mostly a result of more income going to the top of the income distribution.

Suggested Citation

  • Rasmus Wiese & João Tovar Jalles & Jakob de Haan, 2024. "Structural reforms and income distribution: new evidence for OECD countries," Oxford Economic Papers, Oxford University Press, vol. 76(4), pages 1071-1088.
    • Handle: RePEc:oup:oxecpp:v:76:y:2024:i:4:p:1071-1088.
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    File URL: http://hdl.handle.net/10.1093/oep/gpae002
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    Cited by:

    1. Fisera,Boris & Martin Melecky & Dorothe Singer, 2024. "Financial Deepening and Carbon Emissions Intensity : Evidence from a Global Sample of Countries," Policy Research Working Paper Series 10948, The World Bank.
    2. Dinh Trung Nguyen, 2025. "Structural reforms and global value chains: a dynamic analysis of OECD countries based on local projections," International Economics and Economic Policy, Springer, vol. 22(3), pages 1-31, July.
    3. Raul Ramos & Esteban Sanromá & Runhan Ye, 2025. "Do labour market reforms reduce the output growth threshold of Okun's law? An analysis for OECD countries," Economics Bulletin, AccessEcon, vol. 45(1), pages 473-484.
    4. Ablam Estel Apeti & Kwamivi Mawuli Gomado, 2025. "International monetary fund conditionality and structural reforms: Evidence from developing countries," Economics of Transition and Institutional Change, John Wiley & Sons, vol. 33(2), pages 439-486, April.
    5. Wiese, Rasmus & Jalles, João Tovar & de Haan, Jakob, 2025. "The impact of increasing labour market rigidity on employment growth in OECD countries," Economic Analysis and Policy, Elsevier, vol. 85(C), pages 2265-2275.
    6. Potrafke, Niklas & Roesel, Felix, 2025. "Online versus offline: Which networks spur protests?," Journal of Economic Behavior & Organization, Elsevier, vol. 229(C).
    7. Kwamivi Mawuli GOMADO, 2025. "Labor productivity growth effects of structural reforms: evidence from developing countries," Journal of Productivity Analysis, Springer, vol. 63(2), pages 151-182, April.
    8. Serhan Cevik, João Tovar Jalles, 2023. "Restructuring Reforms for Green Growth," Working Papers REM 2023/0278, ISEG - Lisbon School of Economics and Management, REM, Universidade de Lisboa.
    9. Christl, Michael & De Poli, Silvia & Köppl-Turyna, Monika, 2025. "Does redistribution hurt growth? An empirical assessment of the redistribution–growth relationship in the European Union," Economic Modelling, Elsevier, vol. 149(C).
    10. Kwamivi Mawuli Gomado, 2024. "Distributional Effects of Structural Reforms in Developing Countries: Evidence from Financial Liberalization," Open Economies Review, Springer, vol. 35(5), pages 1051-1084, November.
    11. Serhan Cevik & João Tovar Jalles, 2024. "Restructuring reforms for green growth," Scottish Journal of Political Economy, Scottish Economic Society, vol. 71(4), pages 515-541, September.
    12. Rasmus Wiese & Jakob de Haan & João Tovar Jalles, 2023. "The impact of endogenous product and labour market reforms on unemployment: New evidence based on local projections," Working Papers REM 2023/0296, ISEG - Lisbon School of Economics and Management, REM, Universidade de Lisboa.

    More about this item

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General
    • L43 - Industrial Organization - - Antitrust Issues and Policies - - - Legal Monopolies and Regulation or Deregulation
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation

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