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Wage dispersion and pension funds: Financialisation of non-financial corporations in the USA

Author

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  • Ilhan Dogus

    (University of Hamburg)

Abstract

The paper argues that wage dispersion between white-collar and blue-collar workers has caused the rise and expansion of pension funds in a direct and long-run structural manner in the USA. Using data from the Saez-Zucman and the St. Louis Fed’s FRED datasets, the argument is empirically analysed on yearly data for the period 1964-2012 in the USA. The results confirm the existence of a long-run relationship of causality from wage dispersion to the share of pension funds within US households’ financial wealth. Applying a vector error correction model to the data it emerges that the variance in pension funds due to wage dispersion starts to rise after the fifth period, and reaches 69% in the tenth period.

Suggested Citation

  • Ilhan Dogus, 2018. "Wage dispersion and pension funds: Financialisation of non-financial corporations in the USA," PSL Quarterly Review, Economia civile, vol. 71(284), pages 41-59.
    • Handle: RePEc:psl:pslqrr:2018:13
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    Cited by:

    1. Parui, Pintu, 2021. "The Macroeconomic Effects of Financialization and the Wage Gap between Blue and White Collar Workers," Structural Change and Economic Dynamics, Elsevier, vol. 58(C), pages 416-443.
    2. Dögüs, Ilhan, 2021. "Production structure, output and profits - A note," ZÖSS-Discussion Papers 88, University of Hamburg, Centre for Economic and Sociological Studies (CESS/ZÖSS).

    More about this item

    Keywords

    financialisation; pension funds; wage dispersion; savings;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy

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