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Wage dispersion and pension funds: Financialisation of non-financial corporations in the USA, 1966-2013

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  • Dögüs, Ilhan

Abstract

It has already been pointed out in the literature on financialisation that private pension funds have played a key role in the inflation of financial markets. This paper argues that an increase in wage dispersion between white-collar and blue-collar workers affects pension funds in a direct and structural manner. Using Saez-Zucman and fred.stlouisfed annual datasets, the proposed argument is statistically analysed by applying Vector Autoregressive modelling for the period 1966-2013 in the USA. The results show that the responses of share of pension funds within US-household wealth to one-unit shock in wage dispersion are positive and significant over the first three years. Furthermore, wage dispersion explains 11% of variations in pension funds' share in household wealth in the short-run and 19% of variations in the long-run. The study concludes that wage dispersion has a direct and structural impact on pension funds and contributes to the literature by clarifying the rise and expansion of pension funds.

Suggested Citation

  • Dögüs, Ilhan, 2017. "Wage dispersion and pension funds: Financialisation of non-financial corporations in the USA, 1966-2013," ZÖSS-Discussion Papers 63, University of Hamburg, Centre for Economic and Sociological Studies (CESS/ZÖSS).
    • Handle: RePEc:zbw:cessdp:63
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    References listed on IDEAS

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    1. Bruno Bonizzi, 2015. "Capital Market Inflation in Emerging Markets: the Cases of Brazil and South Korea," PSL Quarterly Review, Economia civile, vol. 68(273), pages 115-150.
    2. Blanchflower, David G & Oswald, Andrew J, 1990. "The Determination of White-Collar Pay," Oxford Economic Papers, Oxford University Press, vol. 42(2), pages 356-378, April.
    3. Bruno Bonizzi, 2017. "International financialisation, developing countries and the contradictions of privatised Keynesianism," Economic and Political Studies, Taylor & Francis Journals, vol. 5(1), pages 21-40, January.
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    More about this item

    Keywords

    financialisation; pension funds; wage dispersion; savings out of salaries; white-collar workers; capital market inflation;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy

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