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The determinants of growing economic inequality within advanced democracies

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  • Matthew Rochat

    (University of California)

Abstract

Beginning with the premise that rising economic inequality is an urgent problem burdening some industrialized democratic societies more than others, this paper seeks to examine the primary factors responsible. The purpose is not to provide novel empirical analysis but rather to unite siloed academic discussions and debates under a common theme, to address a problem of mutual concern. The first section frames the puzzle of economic inequality within advanced democracies. Subsequent sections review seminal contributions in five issue areas suggested as likely determinants of growing economic inequality in advanced democracies: technology, globalization, labor institutions, taxes and transfers, and the concentration of markets. I conclude by suggesting that these factors may, in fact, be separate branches of the same tree in that they are deeply intertwined with the economic systems in which they exist. Future work on economic inequality should therefore embrace the Varieties of Capitalism framework as a useful tool for understanding economic inequality.

Suggested Citation

  • Matthew Rochat, 2023. "The determinants of growing economic inequality within advanced democracies," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 70(4), pages 457-475, December.
    • Handle: RePEc:spr:inrvec:v:70:y:2023:i:4:d:10.1007_s12232-023-00427-6
    DOI: 10.1007/s12232-023-00427-6
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    More about this item

    Keywords

    Economic inequality; Technology; Globalization; Labor institutions; Taxes and transfers; Concentration of markets;
    All these keywords.

    JEL classification:

    • J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection

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