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Author/Editor:
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Era Dabla-Norris ; Kalpana Kochhar ; Nujin Suphaphiphat ; Frantisek Ricka ; Evridiki Tsounta
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Publication Date:
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June 15, 2015
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Electronic Access:
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Free Full text
(PDF file size is 1,704KB).
Use the free
Adobe Acrobat Reader
to view this PDF file
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Summary:
This paper analyzes the extent of income inequality from a global perspective, its drivers, and what to do about it. The drivers of inequality vary widely amongst countries, with some common drivers being the skill premium associated with technical change and globalization, weakening protection for labor, and lack of financial inclusion in developing countries. We find that increasing the income share of the poor and the middle class actually increases growth while a rising income share of the top 20 percent results in lower growth—that is, when the rich get richer, benefits do not trickle down. This suggests that policies need to be country specific but should focus on raising the income share of the poor, and ensuring there is no hollowing out of the middle class. To tackle inequality, financial inclusion is imperative in emerging and developing countries while in advanced economies, policies should focus on raising human capital and skills and making tax systems more progressive.
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Order a print copy
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Series:
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Staff Discussion Notes No. 15/13
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Subject(s):
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Income inequality | Economic growth | Income distribution | Technological change | Skilled labor | Labor markets | Globalization | Developed countries | Emerging markets | Cross country analysis
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English
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Publication Date:
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June 15, 2015
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ISBN/ISSN:
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9781513555188
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Format:
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Paper
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Stock No:
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SDNEA201513
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Pages:
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33
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Price:
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US$10.00 )
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Please address any questions about this title to
publications@imf.org
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