Wage dispersion and pension funds: Financialisation of non-financial corporations in the USA, 1966-2013

Ilhan Dögüs

No 63, ZÖSS-Discussion Papers from University of Hamburg, Centre for Economic and Sociological Studies (CESS/ZÖSS)

Abstract: It has already been pointed out in the literature on financialisation that private pension funds have played a key role in the inflation of financial markets. This paper argues that an increase in wage dispersion between white-collar and blue-collar workers affects pension funds in a direct and structural manner. Using Saez-Zucman and fred.stlouisfed annual datasets, the proposed argument is statistically analysed by applying Vector Autoregressive modelling for the period 1966-2013 in the USA. The results show that the responses of share of pension funds within US-household wealth to one-unit shock in wage dispersion are positive and significant over the first three years. Furthermore, wage dispersion explains 11% of variations in pension funds' share in household wealth in the short-run and 19% of variations in the long-run. The study concludes that wage dispersion has a direct and structural impact on pension funds and contributes to the literature by clarifying the rise and expansion of pension funds.

Keywords: financialisation; pension funds; wage dispersion; savings out of salaries; white-collar workers; capital market inflation (search for similar items in EconPapers)
JEL-codes: D14 E44 J31 (search for similar items in EconPapers)
Date: 2017
New Economics Papers: this item is included in nep-age, nep-his and nep-mac
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:cessdp:63

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