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Labour Market Performance, Income Inequality and Poverty in OECD countries

Author

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  • Jean-Marc Burniaux
  • Flavio Padrini
  • Nicola Brandt

Abstract

There have been concerns that employment-enhancing reforms along the lines of the 1994 OECD Jobs Strategy could inadvertently lead to increased income inequality and poverty. This paper focuses on the impact of institutions and redistributive policies on inequality and poverty with the view of assessing whether a trade-off between better labour market performance and equity has taken place in OECD countries, notably in the 1990s. During this period, reductions of unemployment have been associated with rising wage dispersion for workers in most OECD countries. Nevertheless, no clear general trend appears for total disposable income inequality and relative poverty among the total population. These developments suggest that gains from higher employment have in general offset the impact of rising wage dispersion. A preliminary econometric analysis for the period 1978- 2000 fails to detect any robust relationship between labour market institutions/policies and inequality as measured by the Gini coefficient. Please note that annexes are only available on the OECD Economics Department Website at: www.oecd.org/eco/Working_Papers. Performance du marché de l'emploi, inégalité des revenus et pauvreté dans les pays de l'OCDE Des inquiétudes ont été souvent exprimées par la suite selon lesquelles les réformes visant à stimuler l'emploi selon la base de l’Étude de l’OCDE sur l’Emploi publiée en 1994 pourrait en fait se traduire par une augmentation des inégalités des revenus et de la pauvreté. Ce document de travail a pour objet l'impact des institutions et des politiques de redistribution sur l'inégalité et la pauvreté avec la perspective d'évaluer dans quelle mesure un arbitrage entre un meilleur fonctionnement du marché de l'emploi et l'équité des revenus s'est manifesté dans les pays de l'OCDE, notamment, dans les années 90. Au cours de cette période, le chômage a été réduit dans une majorité de pays de l'OCDE et cela simultanément à une augmentation de la dispersion des salaires des travailleurs. Néanmoins, en ce qui concerne l'inégalité des revenus disponibles et la pauvreté relative au niveau de l'ensemble de ménages, il n'est pas possible de dégager une tendance générale. Il semblerait donc que les gains de redistribution associés à l'augmentation de l'emploi ont été suffisants, en général, pour compenser l'augmentation des inégalités salariales. Une analyse économétrique préliminaire pour la période 1978-2000 ne permet pas d'identifier des relations robustes entre les institutions et les politiques du marché de l'emploi, d'une part, et l'inégalité des revenus mesurée par l'indice de Gini, d'autre part. Les annexes sont disponibles uniquement sur le site web du Département des Affaires économiques de l'OCDE: www.oecd.org/eco/Documentsdetravail.

Suggested Citation

  • Jean-Marc Burniaux & Flavio Padrini & Nicola Brandt, 2006. "Labour Market Performance, Income Inequality and Poverty in OECD countries," OECD Economics Department Working Papers 500, OECD Publishing.
  • Handle: RePEc:oec:ecoaaa:500-en
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    File URL: http://dx.doi.org/10.1787/882154447387
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    Cited by:

    1. Cristiano PERUGINI & Fabrizio POMPEI, 2009. "Technological change and income distribution in Europe," International Labour Review, International Labour Organization, vol. 148(1-2), pages 123-148, June.
    2. Cristiano Perugini & Gaetano Martino, 2008. "Income Inequality Within European Regions: Determinants And Effects On Growth," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 54(3), pages 373-406, September.
    3. Márton Medgyesi, 2014. "Components of income inequality and its change in EU countries, 2004-2010," ImPRovE Working Papers 14/01, Herman Deleeck Centre for Social Policy, University of Antwerp.
    4. Rafal Kierzenkowski & Isabell Koske, 2012. "Less Income Inequality and More Growth – Are they Compatible? Part 8. The Drivers of Labour Income Inequality – A Literature Review," OECD Economics Department Working Papers 931, OECD Publishing.
    5. Herr, Hansjörg. & Ruoff, Bea., 2014. "Wage dispersion : empirical developments, explanations, and reform options," ILO Working Papers 994853253402676, International Labour Organization.
    6. Gkinni, Eleni & Vasilaki, Eleni, 2013. "Employment protection and income inequality: is there a role for the informal sector?," MPRA Paper 45464, University Library of Munich, Germany.
    7. Alka Obadic & Nika Simurina & Robert Sonora, 2014. "The effects of tax policy and labour market institutions on income inequality," Zbornik radova Ekonomskog fakulteta u Rijeci/Proceedings of Rijeka Faculty of Economics, University of Rijeka, Faculty of Economics, vol. 32(1), pages 121-140.
    8. Gustavo A. Marrero & Juan Gabriel Rodríguez, 2010. "Inequality of opportunity in Europe: Economic and policy facts," Working Papers 172, ECINEQ, Society for the Study of Economic Inequality.
    9. Kloudova, J., 2010. "Expanse Creative Economy and its Impact on the Less Developed Regions," Journal of the New Economic Association, New Economic Association, issue 5, pages 110-125.
    10. Stephen Machin, 2008. "An Appraisal of Economic Research on Changes in Wage Inequality," LABOUR, CEIS, vol. 22(s1), pages 7-26, June.
    11. Wim Suyker & Henri de Groot & P. Buitelaar, 2007. "India and the Dutch economy; stylised facts and prospects," CPB Document 155, CPB Netherlands Bureau for Economic Policy Analysis.
    12. Dilip Das, 2008. "Contemporary Phase of Globalization: Does It Have a Serious Downside?," Global Economic Review, Taylor & Francis Journals, vol. 37(4), pages 507-526.
    13. Prem Sikka, 2008. "Corporate governance: what about the workers?," Accounting, Auditing & Accountability Journal, Emerald Group Publishing, vol. 21(7), pages 955-977, September.
    14. Wim Suyker & Henri de Groot, 2006. "China and the Dutch economy," CPB Document 127, CPB Netherlands Bureau for Economic Policy Analysis.
    15. Machin, Stephen & Van Reenen, John, 2007. "Changes in wage inequality," LSE Research Online Documents on Economics 4667, London School of Economics and Political Science, LSE Library.
    16. Wen Hao Chen & Michael Förster & Ana Llena-Nozal, 2013. "Globalisation, technological progress and changes in regulations and institutions – which impact on the rise of earnings inequality in OECD countries?," LIS Working papers 597, LIS Cross-National Data Center in Luxembourg.
    17. repec:wsi:jicepx:v:04:y:2013:i:01:n:s179399331350004x is not listed on IDEAS
    18. Maes, Marjan, 2008. "Poverty persistence among Belgian elderly: true or spurious?," ISER Working Paper Series 2008-24, Institute for Social and Economic Research.
    19. repec:ilo:ilowps:485325 is not listed on IDEAS
    20. Stefan Groot & Henri de Groot, 2011. "Wage inequality in the Netherlands: Evidence, trends and explanations," CPB Discussion Paper 186, CPB Netherlands Bureau for Economic Policy Analysis.
    21. 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.

    More about this item

    Keywords

    chômage; distribution des revenus; emploi; employment; income distribution; institutions; institutions; pauvreté; poverty; unemployment;

    JEL classification:

    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
    • J58 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Public Policy
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy

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