Finance and Income Inequality in OECD Countries

Abstract

Complete document available on OLIS in its original formatThis document and any map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area. 42 Unclassified English -Or. English 42 2 OECD Working Papers should not be reported as representing the official views of the OECD or of its member countries. The opinions expressed and arguments employed are those of the author(s).Working Papers describe preliminary results or research in progress by the author(s) and are published to stimulate discussion on a broad range of issues on which the OECD works.

How Do Neoliberal Policies Affect Income Inequality? Exploring the Link Between Liberalization, Finance, and Inequality

“…Third, finance redistributes a larger proportion of national income to wealthy households by enhancing the role of investment income (Nau 2013;Volscho and Kelly 2012). In short, this research indicates financialization augments inequality both within (Godechot 2012;Lin and Tomaskovic-Devey 2013;Nau 2013;Volscho and Kelly 2012) and across advanced industrial societies (Assa 2012;Denk 2015;Kus 2012;Kwon and Roberts 2015;Roberts and Kwon 2017;Zalewski and Whalen 2010).…”

A Common Framework on Inequalities for G7 Countries

“…According to empirical evidence, the increased size of financial intermediaries has contributed to sizeable wage premia of financial sector employees, mostly concentrated at the upper end of the earnings distribution (Denk, ). Similarly, the diffusion of financial instruments and services may have fuelled inequality by providing better investment opportunities to higher income people, notably in education, housing, pensions, and health (Denk and Cournède, ). In addition, the excessive size and relevance of the financial system within the economy have pushed national governments to commit large resources to guarantee, recapitalize and resolve its vulnerabilities during a crisis, leading to a more unequal allocation of public resources (European Commission, ).…”

Allan Meltzer and the Search for a Nominal Anchor

“…This finding is not dominated by EMEs. For example, even for OECD countries, Denk and Cournède (2015) find that financial expansion increased income inequality and there is no evidence that this results from financial crises.…”