scholarly journals The labor share and income inequality: some empirical evidence for the period 1990-2015

2020 ◽  
Vol 28 (84) ◽  
pp. 173-195
Author(s):  
Iñaki Erauskin
Keyword(s):  
Labor Market ◽  
Panel Data ◽  
Income Inequality ◽  
Gini Coefficient ◽  
Content Type ◽  
Labor Share ◽  
Income Share ◽  
The Gini Coefficient ◽  
The Impact ◽  
The Relationship

Purpose The purpose of this paper is to analyze empirically the relationship between the labor share and income inequality, as measured by the Gini coefficient and by the income shares for different quintiles, during the period 1990–2015 for 62 developed and developing countries. Design/methodology/approach This study uses panel data techniques to analyze empirically the relationship between the labor share and income inequality. Findings This paper finds that a lower labor share is associated with a higher Gini coefficient. A lower labor share is found to be strongly associated with a smaller income share for the lowest two quintiles and larger income share for the highest quintile and weakly associated with a smaller income share for the third and fourth quintiles. Moreover, this paper finds that the lower the quintile, the stronger the impact of the labor share on the income share of the quintile. Social implications Policymakers should take into account the evolution of the labor share. Public policies that improve labor market outcomes, such as those aimed to promote participation in the labor market and strengthen the human capital of low-income groups, seem necessary to prevent the rise in economic inequalities. Moreover, as the digital transformation of society progresses, policies to promote skill deepening may have an important role in reversing excessive inequalities. Originality/value How changes in the labor share are associated with changes in the Gini coefficient, and how this is driven by income shares for different quintiles, for a broad range of countries during the most recent period, has not been comprehensively studied using panel data techniques.

scholarly journals Financialization and Income Inequality in Selected European Countries, 2004–2013

e-Finanse ◽  
2017 ◽  
Vol 12 (4) ◽  
pp. 20-32
Author(s):  
Grzegorz Golebiowski ◽  
Piotr Szczepankowski ◽  
Dorota Wisniewska
Keyword(s):  
Income Inequality ◽  
Eastern Europe ◽  
Gini Coefficient ◽  
Central And Eastern Europe ◽  
Value Added ◽  
European Countries ◽  
Total Employment ◽  
The Gini Coefficient ◽  
Synthetic Indicator ◽  
The Impact

Abstract The article examines the impact of financialization on income inequality between 2004 and 2013, through a panel analysis of seven European countries. Moreover, it attempts to examine differences in the perception of the phenomenon between the selected European countries belonging to the G-7 and countries from Central and Eastern Europe. The results demonstrate the existence of individual effects, which means that the level of inequality under examination is influenced predominantly by country-specific factors. The most significant correlation is noticeable between the level of unemployment and the degree of income inequality. An increase in unemployment is accompanied by a rise in the disproportions in the level of income that individual citizens have at their disposal whereas a decrease in the unemployment level contributes to an improvement of the GINI coefficient. Simultaneously, the results confirm the existence of significant correlations between the level of the GINI coefficient and such financialization indicators as the share of employment in finance in total employment and the contribution of the financial sector to total value added creation. The most prominent dependency was discovered when a constructed synthetic indicator was adopted as an indicator of financialization. At the same time, analysis of the synthetic country financialization indicator points to a conclusion that the level of financialization is higher in European countries belonging to the G-7 (especially Great Britain) than in countries from Central and Eastern Europe.

The impact of media on entrepreneurship participation: a cross-country panel data analysis

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Muhammad Arshad ◽  
Sharjeel Saleem ◽  
Rabeeya Raoof ◽  
Naheed Sultana
Keyword(s):  
Panel Data ◽  
New Product Development ◽  
Indirect Effect ◽  
Cognitive Theory ◽  
Early Stage ◽  
Entrepreneurial Intention ◽  
Content Type ◽  
Informal Investment ◽  
The Impact ◽  
The Relationship

Purpose Unlike the previous studies that examined the direct relationship between media attention on entrepreneurship (MAE) and entrepreneurship participation, this paper aims to examine the mediated link through entrepreneurial intention. Design/methodology/approach The cognitive theory of media provides the foundation for predictions that primary outcome of MAE is the entrepreneurial intention which in turn affects the different types of entrepreneurship participation (early-stage startup activities, new product development [NPD] activities and informal investment activities). The test of the hypothesized model relies on panel data for 2010–2015 on 40 developing and developed countries taken from the Global Entrepreneurship Monitor report of 2015. Findings MAE has an indirect effect on two types of entrepreneurship participation (early-stage startup activities and informal investment activities) via entrepreneurial intention, whereas there is no direct or indirect effect of MAE on NPD activities. The findings also suggest when the entrepreneurial intention is added as a mediator in the model; the direct effect of MAE on early-stage entrepreneurial activities becomes insignificant. Originality/value To the best of the authors’ knowledge, this is the first study in its nature which established the relationship between MAE and entrepreneurial intention. In addition, this study also explained the mediation mechanism between the relationship of MAE and entrepreneurship participation by using the panel data.

The impacts of sector growth and monetary policy on income inequality in developing countries

2019 ◽  
Vol 46 (3) ◽  
pp. 591-610 ◽  
Author(s):  
Sima Siami-Namini ◽  
Darren Hudson
Keyword(s):  
Economic Growth ◽  
Developing Countries ◽  
Monetary Policy ◽  
Panel Data ◽  
Income Inequality ◽  
Nonlinear Effect ◽  
Service Sector ◽  
Functional Form ◽  
Content Type ◽  
The Relationship

PurposeThe purpose of this paper is to explore the effect of growth in different sectors of the economy of developing countries on income inequality and analyze how inflation, as a proxy for monetary policy, makes a proportionate contribution for setting a binding national target for reducing income inequality. The paper examines the existence of a linear or nonlinear effect of inflation and sectoral economic growth on income inequality using a balanced panel data of 92 developing countries for the period of 1990–2014.Design/methodology/approachMethods section includes several steps as below: first, the functional form of the model using panel data for investigating the contribution of economic sectors in income inequality; second, to estimate the relationship between income inequality and sector growth: testing the Kuznets hypothesis; third, to estimate the relationship between inflation and income inequality base on general functional form of the model proposed by Amornthum (2004); fourth, a panel Granger causality analysis based on a VECM approach.FindingsThe statistically significant finding shows that first agricultural growth and then industrial growth have a dominate impact in reducing income inequality in our sample. But, the service sector growth has positive effects. The results confirm the existence of Kuznets inverted “U” hypothesis for industry growth and Kuznets “U” hypothesis for service sector growth. The findings show that sector growth and inflation affect income inequality in the long-run.Originality/valueThis research is an original paper which analyzes the effect of growth in different sectors of the economy of developing countries (agriculture, manufacturing and services sectors) on income inequality and test the Kuznets hypothesis in terms of sector growth and at the same time, examine the existence of a linear/nonlinear effect of inflation and sectoral economic growth on income inequality and test Granger causality relationship between income inequality and sector growth and inflation.

The great reanimation

2020 ◽  
Vol 41 (6) ◽  
pp. 81-84
Author(s):  
Peter Buell Hirsch
Keyword(s):  
Income Inequality ◽  
Design Methodology ◽  
Labor Movements ◽  
Tipping Points ◽  
Political Will ◽  
Content Type ◽  
Corporate Behavior ◽  
Emerging Trends ◽  
The Impact ◽  
The Relationship

Purpose The purpose of this paper is to highlight the ways in which long running secular trends and the COVID-19 pandemic have combined to re-energize labor movements and pushed political thinking to the left. Design/methodology/approach A review of emerging trends in public opinion and labor action to identify some critical tipping points. Findings There is a critical shift unfolding in which government intervention to stem income inequality is becoming politically acceptable. Originality/value To the best of the author’s knowledge, there have been few, if any comparable discussions of the relationship between the impact of the COVID-19 pandemic and the political will to stem income inequality and the implications for corporate behavior.

scholarly journals A Meta-Analysis of the Association between Income Inequality and Intergenerational Mobility

2019 ◽  
Vol 5 ◽  
pp. 237802311988128 ◽  
Author(s):  
Ernesto F. L. Amaral ◽  
Shih-Keng Yen ◽  
Sharron Xuanren Wang-Goodman
Keyword(s):  
Income Inequality ◽  
Gini Coefficient ◽  
Intergenerational Mobility ◽  
Meta Analysis ◽  
The United States ◽  
Income Share ◽  
Income Elasticities ◽  
Great Gatsby ◽  
The Gini Coefficient ◽  
Over Time

We provide an overview of associations between income inequality and intergenerational mobility in the United States, Canada, and eight European countries. We analyze whether this correlation is observed across and within countries over time. We investigate Great Gatsby curves and perform metaregression analyses based on several papers on this topic. Results suggest that countries with high levels of inequality tend to have lower levels of mobility. Intergenerational income elasticities have stronger associations with the Gini coefficient compared to associations with the top 1 percent income share. Once models are controlled for methodological variables, country indicators, and paper indicators, correlations of mobility with the Gini coefficient lose significance but not with the top 1 percent income share. This result is an indication that recent increases in inequality at the top of the distribution might be negatively affecting mobility on a greater magnitude compared to variations across the income distribution.

THE IMPACTS OF GLOBALIZATION ON THE LABOR SHARE: EVIDENCE FROM ASIA

2020 ◽  
Vol 65 (supp01) ◽  
pp. 57-73
Author(s):  
XIAOSHAN HU ◽  
GUANGHUA WAN ◽  
JING WANG
Keyword(s):  
Developing Countries ◽  
Panel Data ◽  
Income Inequality ◽  
World Wide ◽  
Trade Openness ◽  
Labor Income ◽  
Significant Determinant ◽  
Outward Fdi ◽  
Labor Share ◽  
The Impact

The decline in the share of labor income — an indicator of functional income distribution — has contributed to rising income inequality world-wide. Despite a growing literature, little is known about the effects of globalization on the labor share or inequality in Asia where some of the economies are most globalized. Applying fixed-effect regressions to panel data from 29 Asian economies over the period from 1980 to 2014, we focus on the impacts of globalization on the labor share in Asia where globalization is measured by trade openness and FDI. The modeling results show that trade openness is a significant determinant of the labor share. More specifically, the impact of export is significantly negative and the impact of import is positive. In terms of FDI, the coefficient of the inward FDI is significantly positive and that of the outward FDI is significantly negative in developing countries only.

scholarly journals Sampling Errors and Cross-Country Comparisons of Income Inequality

2001 ◽  
Author(s):  
Rolf Aaberge
Keyword(s):  
Income Inequality ◽  
Gini Coefficient ◽  
Alternative Measure ◽  
Sampling Errors ◽  
The Gini Coefficient ◽  
Wide Range ◽  
Cross Country ◽  
The Impact ◽  
Cross National

The growing interest in cross-national comparisons of income inequality is primarily a result of the establishment of the Luxembourg Income Study (LIS) database and the wide range of studies on income inequality based on LIS data. The majority of these studies suffer, however, from a major weakness since sampling errors are neither reported nor taken into account when nations are ranked according to estimates of the Gini coefficient or some alternative measure of inequality. This paper discusses the impact of accounting for sampling errors when making comparisons of income inequality across nations.

The impact of training on productivity and wages in Tunisia

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Naouel Ben Jemaa Cherif
Keyword(s):  
Labor Market ◽  
Panel Data ◽  
Labor Markets ◽  
Developing Country ◽  
Labor Productivity ◽  
Design Methodology ◽  
Wage Structure ◽  
Content Type ◽  
Returns To Training ◽  
The Impact

PurposeThe purpose of this paper is to investigate the impact of training on labor productivity and wages in order to examine how the benefits from training are shared between employers and employees.Design/methodology/approachThis study analyzes an industry panel covering all sectors of the Tunisian economy for the period 2000–2014. The panel structure of the data allows controlling for the endogeneity of training by using different panel data techniques.FindingsResults show that both employers and workers benefit from training since it has a positive and significant effect on productivity and wages. However, the effect of training on productivity is substantially higher than on wages, suggesting that employers obtain the largest part of the returns to training. This result is consistent with theories that explain firm-sponsored training by a compressed wage structure in imperfect labor markets.Originality/valueThis study, particularly showcasing the labor market in Tunisia, is one of the first to provide estimates for a developing country to assess the effects of training for both employer and employee. It is also among the few empirical works that analyzed the impact of training on labor productivity and wages simultaneously.

Income distribution gains will slow in Latin America

2016 ◽  
Keyword(s):  
Latin America ◽  
Income Inequality ◽  
Labour Market ◽  
Gini Coefficient ◽  
Income Taxes ◽  
Market Outcomes ◽  
Content Type ◽  
Income Share ◽  
Fiscal Constraints ◽  
Labour Market Outcomes

Subject Income inequality in Latin America. Significance Between 2003 and 2013, income inequality declined across Latin America, although the income share of the wealthy remained high. A combination of positive labour market outcomes and more inclusive social policies contributed to these results. Since 2013, however, the gains have slowed, and inequality has again increased in some countries. Impacts Improvements in the Gini coefficient are slowing across the region; in Bolivia and Mexico, inequality has again risen. Further deterioration of public services and increasing segmentation in both social delivery and labour market outcomes appears likely. A shift to the centre-right and fiscal constraints may reduce efforts to implement progressive income taxes or protect labour rights.

scholarly journals Income inequality and financialization: a not so straightforward relationship

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Constantinos Alexiou ◽  
Emmanouil Trachanas ◽  
Sofoklis Vogiazas
Keyword(s):  
Income Inequality ◽  
Gini Coefficient ◽  
Trade Unions ◽  
Fixed Effects ◽  
Credit Market ◽  
Market Regulation ◽  
Cross Sectional ◽  
Content Type ◽  
Panel Fixed Effects ◽  
The Impact

PurposeThe authors explore the impact of financialization on income inequality for a panel of 19 OECD countries over the period 2000–2017. The authors control for the effect of banking crises, credit market regulation and globalization, among other factors.Design/methodology/approachThe authors use three proxies for income inequality and four proxies for financialization. The authors employ a panel fixed effects approach using Driscoll and Kraay’s (1998) nonparametric covariance matrix estimator, which produces standard errors that are robust to general forms of cross-sectional dependence.FindingsThe authors provide evidence which to a great extent supports the view that the process of financialization has increased income inequality. In the disposable Gini specifications, two out of the four financialization measures are found to significantly contribute to rising inequality whilst in the specification with the market income Gini coefficient, three out of the four financialization proxies appear to adversely affect inequality. In the specification with the Gini coefficient based on manufacturing pay, the evidence is weak. Furthermore, trade unions appear to play a significant role in reducing inequality in two out of the three Gini specifications while the effect of credit market regulation is rather ambiguous.Originality/valueThe authors’ findings suggest a positive relationship between financialization and income inequality; however, the results depend on the proxies used to measure financialization and income inequality. The authors conclude that the process of financialization in triggering income inequality is complex and merits additional research.

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