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Functional Income Distribution and Its Role in Explaining Inequality

Author

Listed:
  • Maura Francese
  • Mr. Carlos Mulas-Granados

Abstract

This paper is motivated by two parallel trends: the declining labor share of income and increasing inequality. Micro and macroeconomic data, covering up to 93 countries between 1970 and 2013, are used to assess whether the declining labor share of income has been a key factor driving growing inequality. The major conclusion is that changes in income inequality across a wide range of countries have been driven significantly by changes in the inequality of wages, while the distribution of income between labor and capital has not been a major factor.

Suggested Citation

  • Maura Francese & Mr. Carlos Mulas-Granados, 2015. "Functional Income Distribution and Its Role in Explaining Inequality," IMF Working Papers 2015/244, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2015/244
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    References listed on IDEAS

    as
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