Teulings, C. (2014) “Why does inequality grow? Can we do something about it?“, VoxEU Organisation, 15 June.
The income inequality has increased worldwide in recent years. This column discusses the role of technological progress, globalisation, and the liberalisation of labour-market institutions on the growing inequality. The liberalisation of labour market institutions has made labour markets more flexible and created many jobs. But beyond a certain point, the net effect of further liberalisation might be negative for society.
Over the past couple of years, the OECD asked attention for the rapidly widening income dispersion in OECD countries (see e.g. OECD 2008, OECD 2014). The recent publication of Thomas Piketty’s Capital in the 21st Century, gave new impetus to this debate.
There were large shifts in the distribution of total income, both from labour to capital, and within the labour share – from low- to high-earning workers. This growing inequality has a large impact on many aspects of society, from diverging educational opportunities, to the distribution of health and overall well-being. Though there are marked differences between countries, the rise in inequality has been a general phenomenon. Hence, there is a quest for more inclusive strategies that allow larger parts of society to benefit from the growth of GDP.
Relevant posts:
- Merkel, W. (2014) “Failing Union Of Capitalism And Democracy Fuels Rise In Inequality“, Social Europe Journal, 03 June.
- Hoffer, F. (2014) “Inequality And Post-neoliberal Globalisation“, Social Europe Journal, 29 May.
- Matsaganis, M. & Leventi, C. (2014) “Poverty and Inequality during the Great Recession in Greece“, Political Studies Review, 12: 209–223.