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Reducing Income Inequality While Boosting Economic Growth: Can It Be Done? Evidence From Oecd Countries

Author

Listed:
  • PETER HOELLER

    (Organisation for Economic Co-operation and Development (OECD), OECD, 2, rue André Pascal, 75775 Paris CEDEX 16, France)

  • ISABELLE JOUMARD

    (Organisation for Economic Co-operation and Development (OECD), OECD, 2, rue André Pascal, 75775 Paris CEDEX 16, France)

  • ISABELL KOSKE

    () (Organisation for Economic Co-operation and Development (OECD), OECD, 2, rue André Pascal, 75775 Paris CEDEX 16, France)

Abstract

This paper identifies inequality patterns across Organisation for Economic Co-operation and Development (OECD) countries and provides new analysis of their policy and non-policy drivers. One key finding is that education and anti-discrimination policies, well-designed labor market institutions and large and/or progressive tax and transfer systems can all reduce income inequality. On this basis, the paper identifies several policy reforms that could yield a double dividend in terms of boosting GDP per capita and reducing income inequality, and also flags other policy areas where reforms would entail a trade-off between both objectives.

Suggested Citation

  • Peter Hoeller & Isabelle Joumard & Isabell Koske, 2014. "Reducing Income Inequality While Boosting Economic Growth: Can It Be Done? Evidence From Oecd Countries," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 59(01), pages 1-22.
    • Handle: RePEc:wsi:serxxx:v:59:y:2014:i:01:n:s0217590814500015
    DOI: 10.1142/S0217590814500015
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    References listed on IDEAS

    as
    1. Thomas Piketty, 2011. "On the Long-Run Evolution of Inheritance: France 1820--2050," The Quarterly Journal of Economics, Oxford University Press, vol. 126(3), pages 1071-1131.
    2. Isabell Koske & Jean-Marc Fournier & Isabelle Wanner, 2012. "Less Income Inequality and More Growth – Are They Compatible? Part 2. The Distribution of Labour Income," OECD Economics Department Working Papers 925, OECD Publishing.
    3. Neumark, David & Wascher, William L., 2007. "Minimum Wages and Employment," Foundations and Trends(R) in Microeconomics, now publishers, vol. 3(1–2), pages 1-182, March.
    4. Orsetta Causa & Sébastien Jean, 2007. "Integration of Immigrants in OECD Countries: Do Policies Matter?," OECD Economics Department Working Papers 564, OECD Publishing.
    5. Jean-Marc Fournier & Isabell Koske, 2012. "Less Income Inequality and More Growth – Are they Compatible? Part 7. The Drivers of Labour Earnings Inequality – An Analysis Based on Conditional and Unconditional Quantile Regressions," OECD Economics Department Working Papers 930, OECD Publishing.
    6. Isabell Koske & Jean-Marc Fournier & Isabelle Wanner, 2014. "The Distribution Of Labor Income," World Scientific Book Chapters, in: Peter Hoeller & Isabelle Joumard & Isabell Koske (ed.),Income Inequality in OECD Countries What are the Drivers and Policy Options?, chapter 3, pages 43-84, World Scientific Publishing Co. Pte. Ltd..
    7. Thomas Dalsgaard, 2000. "The Tax System in Mexico: A Need for Strengthening the Revenue-Raising Capacity," OECD Economics Department Working Papers 233, OECD Publishing.
    8. Kaja Bonesmo Fredriksen, 2012. "Less Income Inequality and More Growth – Are they Compatible? Part 6. The Distribution of Wealth," OECD Economics Department Working Papers 929, OECD Publishing.
    9. Paul Conway & Donato de Rosa & Giuseppe Nicoletti & Faye Steiner, 2006. "Regulation, Competition and Productivity Convergence," OECD Economics Department Working Papers 509, OECD Publishing.
    10. Åsa Johansson & Chistopher Heady & Jens Arnold & Bert Brys & Laura Vartia, 2008. "Taxation and Economic Growth," OECD Economics Department Working Papers 620, OECD Publishing.
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    Citations

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    Cited by:

    1. Maqbool H. Sial & Ghulam Sarwar & Mubashra Saeed, 2019. "Surplus Education and Earnings Differentials in Pakistan: A Quantile Regression Analysis," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 24(2), pages 93-114, July-Dec.
    2. Young Eun Kim & Norman V. Loayza, 2019. "Crecimiento de la productividad: patrones y determinantes en todo el mundo," Revista Economía, Fondo Editorial - Pontificia Universidad Católica del Perú, vol. 42(84), pages 36-93.
    3. Topcu, Mert & Tugcu, Can Tansel, 2020. "The impact of renewable energy consumption on income inequality: Evidence from developed countries," Renewable Energy, Elsevier, vol. 151(C), pages 1134-1140.
    4. Vanesa Jorda & Jose M. Alonso, 2020. "What works to mitigate and reduce relative (and absolute) inequality?: A systematic review," WIDER Working Paper Series wp-2020-152, World Institute for Development Economic Research (UNU-WIDER).

    More about this item

    Keywords

    Income inequality; tax and transfer systems; education policy; labor market policy; JEL Classification: D31; JEL Classification: H23; JEL Classification: H53; JEL Classification: I24; JEL Classification: J68;

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy

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