Functional Income Distribution and Its Role in Explaining Inequality

Author/Editor:

Maura Francese ; Carlos Mulas-Granados

Publication Date:

November 24, 2015

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

This paper is motivated by two parallel trends: the declining labor share of income and increasing inequality. Micro and macroeconomic data, covering up to 93 countries between 1970 and 2013, are used to assess whether the declining labor share of income has been a key factor driving growing inequality. The major conclusion is that changes in income inequality across a wide range of countries have been driven significantly by changes in the inequality of wages, while the distribution of income between labor and capital has not been a major factor.

Series:

Working Paper No. 2015/244

Subject:

Income distribution Income inequality Labor Labor share National accounts Personal income

English

Publication Date:

November 24, 2015

ISBN/ISSN:

9781513549828/1018-5941

Stock No:

WPIEA2015244

Pages:

33

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