IDEAS home Printed from https://ideas.repec.org/p/ssa/lemwps/2015-20.html
   My bibliography  Save this paper

Four engines of inequality

Author

Listed:
  • Maurizio Franzini
  • Mario Pianta

Abstract

After much empirical documentation of patterns of inequality, we address in this paper the need for a convincing interpretation of the causes of inequality in advanced countries. We set the current debate in the context of the evolution of ideas on inequality, including the debate on Thomas Piketty' book. We argue that four "engines of inequality" can be identified - the power of capital over labour, the rise of "oligarchs capitalis", the individualisation of economic conditions, the retreat of politics - as key sources of today's inequalities. Each of these mechanisms is examined on the basis on concepts and data, with a detailed consideration of the results from the current literature and of the empirical evidence available. A full analysis of the dynamics of inequality, an interpretation of its mechanisms and a set of policy proposals to reverse it are developed in our book "Explaining inequality" (Franzini and Pianta, 2015).

Suggested Citation

  • Maurizio Franzini & Mario Pianta, 2015. "Four engines of inequality," LEM Papers Series 2015/20, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
  • Handle: RePEc:ssa:lemwps:2015/20
    as

    Download full text from publisher

    File URL: http://www.lem.sssup.it/WPLem/files/2015-20.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Frank Levy & Peter Temin, 2007. "Inequality and Institutions in 20th Century America," NBER Working Papers 13106, National Bureau of Economic Research, Inc.
    2. Hudson, John & Sessions, John G., 2011. "Parental education, labor market experience and earnings: New wine in an old bottle?," Economics Letters, Elsevier, vol. 113(2), pages 112-115.
    3. Valeria Cirillo & Mario Pianta & Leopoldo Nascia, 2014. "The Shaping of Skills:Wages, Education, Innovation," Working Papers 1406, University of Urbino Carlo Bo, Department of Economics, Society & Politics - Scientific Committee - L. Stefanini & G. Travaglini, revised 2014.
    4. Atkinson, A. B. & Piketty, Thomas (ed.), 2010. "Top Incomes: A Global Perspective," OUP Catalogue, Oxford University Press, number 9780199286898.
    5. DiNardo, John & Fortin, Nicole M & Lemieux, Thomas, 1996. "Labor Market Institutions and the Distribution of Wages, 1973-1992: A Semiparametric Approach," Econometrica, Econometric Society, vol. 64(5), pages 1001-1044, September.
    6. Angus Deaton, 2005. "Measuring Poverty in a Growing World (or Measuring Growth in a Poor World)," The Review of Economics and Statistics, MIT Press, vol. 87(1), pages 1-19, February.
    7. Anthony B. Atkinson & Thomas Piketty & Emmanuel Saez, 2011. "Top Incomes in the Long Run of History," Journal of Economic Literature, American Economic Association, vol. 49(1), pages 3-71, March.
    8. Freeman, Chris & Louca, Francisco, 2002. "As Time Goes By: From the Industrial Revolutions to the Information Revolution," OUP Catalogue, Oxford University Press, number 9780199251056.
    9. William Lazonick & Mariana Mazzucato, 2013. "The risk-reward nexus in the innovation-inequality relationship: who takes the risks? Who gets the rewards ?," Industrial and Corporate Change, Oxford University Press, vol. 22(4), pages 1093-1128, August.
    10. Jon Bakija & Adam Cole & Bradley Heim, 2008. "Jobs and Income Growth of Top Earners and the Causes of Changing Income Inequality: Evidence from U.S. Tax Return Data," Department of Economics Working Papers 2010-22, Department of Economics, Williams College, revised Jan 2012.
    11. Cornia, Giovanni Andrea (ed.), 2004. "Inequality, Growth, and Poverty in an Era of Liberalization and Globalization," OUP Catalogue, Oxford University Press, number 9780199271412.
    12. Era Dabla-Norris & Kalpana Kochhar & Nujin Suphaphiphat & Frantisek Ricka & Evridiki Tsounta, 2015. "Causes and Consequences of Income Inequality; A Global Perspective," IMF Staff Discussion Notes 15/13, International Monetary Fund.
    13. Markus Jantti & Eva Sierminska & Tim Smeeding, 2008. "The Joint Distribution of Household Income and Wealth: Evidence from the Luxembourg Wealth Study," OECD Social, Employment and Migration Working Papers 65, OECD Publishing.
    14. Daron Acemoglu, 2002. "Technical Change, Inequality, and the Labor Market," Journal of Economic Literature, American Economic Association, vol. 40(1), pages 7-72, March.
    15. Angus Deaton, 2005. "ERRATUM: Measuring Poverty in a Growing World (or Measuring Growth in a Poor World)," The Review of Economics and Statistics, MIT Press, vol. 87(2), pages 395-395, May.
    16. Brent Neiman, 2014. "The Global Decline of the Labor Share," The Quarterly Journal of Economics, Oxford University Press, vol. 129(1), pages 61-103.
    17. Cornia, Giovanni Andrea, 2012. "Inequality Trends and their Determinants: Latin America over 1990-2010," WIDER Working Paper Series 009, World Institute for Development Economic Research (UNU-WIDER).
    18. Miles Corak, 2013. "Income Inequality, Equality of Opportunity, and Intergenerational Mobility," Journal of Economic Perspectives, American Economic Association, vol. 27(3), pages 79-102, Summer.
    19. Daniele Checchi & Cecilia García‐Peñalosa, 2010. "Labour Market Institutions and the Personal Distribution of Income in the OECD," Economica, London School of Economics and Political Science, vol. 77(307), pages 413-450, July.
    20. Eli Bekman & John Bound & Stephen Machin, 1998. "Implications of Skill-Biased Technological Change: International Evidence," The Quarterly Journal of Economics, Oxford University Press, vol. 113(4), pages 1245-1279.
    21. repec:unu:wpaper:wp2012-09 is not listed on IDEAS
    22. Facundo Alvaredo & Anthony B. Atkinson & Thomas Piketty & Emmanuel Saez, 2013. "The Top 1 Percent in International and Historical Perspective," Journal of Economic Perspectives, American Economic Association, vol. 27(3), pages 3-20, Summer.
    23. Maarten Goos & Alan Manning, 2007. "Lousy and Lovely Jobs: The Rising Polarization of Work in Britain," The Review of Economics and Statistics, MIT Press, vol. 89(1), pages 118-133, February.
    24. Francesco Bogliacino, 2009. "Poorer workers. The determinants of wage formation in Europe," International Review of Applied Economics, Taylor & Francis Journals, vol. 23(3), pages 327-343.
    25. David H. Autor & Lawrence F. Katz & Melissa S. Kearney, 2006. "The Polarization of the U.S. Labor Market," American Economic Review, American Economic Association, vol. 96(2), pages 189-194, May.
    26. Sudhir Anand & Paul Segal, 2008. "What Do We Know about Global Income Inequality?," Journal of Economic Literature, American Economic Association, vol. 46(1), pages 57-94, March.
    27. Salvatore Morelli & Timothy Smeeding & Jeffrey Thompson, 2014. "Post-1970 Trends in Within-Country Inequality and Poverty: Rich and Middle Income Countries," CSEF Working Papers 356, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
    28. Sudhir Anand & Paul Segal, 2014. "The Global Distribution of Income," Economics Series Working Papers 714, University of Oxford, Department of Economics.
    29. Leopoldo Nascia & Mario Pianta, 2009. "Forces of inequality? The impact of technology and globalisation," Intereconomics: Review of European Economic Policy, Springer;German National Library of Economics;Centre for European Policy Studies (CEPS), vol. 44(6), pages 332-336, November.
    30. Elisabetta Croci Angelini & Francesco Farina & Mario Pianta, 2009. "Innovation and wage polarisation in Europe," International Review of Applied Economics, Taylor & Francis Journals, vol. 23(3), pages 309-325.
    31. Maarten Goos & Alan Manning & Anna Salomons, 2014. "Explaining Job Polarization: Routine-Biased Technological Change and Offshoring," American Economic Review, American Economic Association, vol. 104(8), pages 2509-2526, August.
    32. Daniele Checchi & Cecilia García-Peñalosa, 2008. "Labour market institutions and income inequality," Economic Policy, CEPR;CES;MSH, vol. 23, pages 601-649, October.
    33. Acemoglu, Daron & Autor, David, 2011. "Skills, Tasks and Technologies: Implications for Employment and Earnings," Handbook of Labor Economics, Elsevier.
    34. Robert J. Gordon, 2014. "The Demise of U.S. Economic Growth: Restatement, Rebuttal, and Reflections," NBER Working Papers 19895, National Bureau of Economic Research, Inc.
    35. Maurizio Franzini & Michele Raitano & Francesco Vona, 2013. "The channels of intergenerational transmission of inequality: a cross-country comparison," Rivista italiana degli economisti, Società editrice il Mulino, issue 2, pages 201-226.
    36. Marc Lavoie & Stockhammer Engelbert, 2013. "Wage-Led Growth: An Equitable Strategy for Economic Recovery," Post-Print hal-01343664, HAL.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Inequality; Income distribution; Capital; Labour;

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ssa:lemwps:2015/20. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (). General contact details of provider: http://edirc.repec.org/data/labssit.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.