Inequality and Labor Market Institutions
Staff Discussion Notes, July 1, 2015
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Bibliographic details
- Authors: Florence Jaumotte
- Published: July 1, 2015
- Series: Staff Discussion Notes
- DOI: https://doi.org/10.5089/9781513577258.006
Summary findings
- The SDN examines the role of labor market institutions in the rise of income inequality in advanced economies, alongside other determinants.
- Evidence strongly indicates that de-unionization is associated with rising top earners’ income shares and less redistribution.
- Eroding minimum wages are related to increases in overall income inequality.
- 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 requires a multipronged approach, which should include taxation reform and curbing excesses associated with financial deregulation.
Evidence and analytical emphasis
- Focus on advanced economies and multiple determinants of income inequality.
- Emphasis on associations between:
- de-unionization and rising top earners’ income shares and less redistribution,
- eroding minimum wages and increases in overall income inequality,
- lack of union representativeness and higher inequality.
- Uses terminology and concepts including: collective bargaining, density need, Gini of gross income, income share, least squares, share statistics, top income shares, union density.
Policy implications and recommendations
- No blanket policy prescription: higher unionization and higher minimum wages are not universally recommended without assessing country-specific circumstances and trade-offs with other policy objectives.
- Recommended elements of a multipronged strategy to address inequality:
- taxation reform,
- curbing excesses associated with financial deregulation,
- consideration of labor market institutions (unionization, collective bargaining, minimum wages) within national contexts.
Publication and metadata
- Author: Florence Jaumotte
- Date: July 1, 2015
- Series: Staff Discussion Notes No. 2015/014
- Issue: 014
- Volume: 2015
- Pages: 30
- DOI: https://doi.org/10.5089/9781513577258.006
- Stock No: SDNEA201514
- ISBN: 9781513577258
- ISSN: 2617-6750
- Subjects: Income distribution, Income inequality, Labor, Labor market institutions, Minimum wages, National accounts, Personal income
- Keywords: collective bargaining, density need, Gini of gross income, income distribution, Income distribution, Income inequality, income share, Inequality, Labor market institutions, least squares, minimum wage, Minimum wages, Personal income, political system, SDN, share statistics, Southern Europe, top income shares, union, union density, unions
Source: Inequality and Labor Market Institutions, Staff Discussion Notes (Florence Jaumotte), July 1, 2015.