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The Drivers of Inequality in Rich Countries

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  • Nolan, Brian
  • Richiardi, Matteo
  • Valenzuela, Luis

Abstract

Rising income inequality has recently come centre-stage as a core societal concern for rich countries. The diagnosis of the forces driving inequality upwards and their relative importance remains hotly contested, notably with respect to the roles of globalization versus technology and of market forces versus institutions and policy choices. This survey provides a critical review and synthesis of recent research. The focus is on income inequality across the entire distribution, rather than only on what has been happening at the very top. We pay particular attention to including what has been learned from the analysis of micro-data, to ensuring that the coverage is not unduly US-centric, and to analyses of the interrelations between the different drivers of inequality. We conclude by highlighting key gaps in knowledge and clarifying what stands in the way of a consensus emerging about the contribution of the various forces affecting how income inequality has evolved in recent decades.

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  • Nolan, Brian & Richiardi, Matteo & Valenzuela, Luis, 2018. "The Drivers of Inequality in Rich Countries," MPRA Paper 89806, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:89806
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    Cited by:

    1. Michał Brzeziński & Michał Myck & Mateusz Najsztub, 2019. "Reevaluating distributional consequences of the transition to market economy in Poland: new results from combined household survey and tax return data," Working Papers 2019-18, Faculty of Economic Sciences, University of Warsaw.

    More about this item

    Keywords

    inequality; wage dispersion; technology; globalization; market power;

    JEL classification:

    • D30 - Microeconomics - - Distribution - - - General
    • D40 - Microeconomics - - Market Structure, Pricing, and Design - - - General
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • F66 - International Economics - - Economic Impacts of Globalization - - - Labor
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • J0 - Labor and Demographic Economics - - General
    • J00 - Labor and Demographic Economics - - General - - - General

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