Inequality and Labor Market Institutions

Author/Editor: Florence Jaumotte ; Carolina Osorio
Publication Date: July 17, 2015
Electronic Access: Free Full text (PDF file size is 1,352KB).
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Summary: The SDN examines the role of labor market institutions in the rise of income inequality in advanced economies, alongside other determinants. The evidence strongly indicates that de-unionization is associated with rising top earners’ income shares and less redistribution, while eroding minimum wages are related to increases in overall income inequality. The results, however, also suggest that a lack of representativeness of unions may be associated with higher inequality. These findings do not necessarily constitute a blanket recommendation for higher unionization and minimum wages, as country-specific circumstances and potential trade-offs with other policy objectives need to be considered. Addressing inequality also requires a multipronged approach, which should include taxation reform and curbing excesses associated with financial deregulation.
Series: Staff Discussion Note No. 15/14
Subject(s): Labor market institutions | Income inequality | Income distribution | Minimum wages | Labor unions | Developed countries

Publication Date: July 17, 2015
ISBN/ISSN: 9781513577258 Format: Paper
Stock No: SDNEA201514 Pages: 30
US$10.00 (Academic Rate:
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