Why Has Wage Inequality Risen Most Where Wage Shares Have Fallen Least?

Declan Trott

No 685, CEPR Discussion Papers from Centre for Economic Policy Research, Research School of Economics, Australian National University

Abstract: Most developed countries have experienced rising wage inequality and falling wage shares, which are often blamed on the same forces - globalisation, technical change, and weakening labour market institutions. This paper shows, however, that wage inequality has risen the most in those countries where wage shares have fallen the least, and vice-versa. It is difficult to plausibly account for this pattern using a range of proxies for the above and other suggested explanations. Excluding the top 1% of incomes from the wage share makes little difference to the results

Keywords: wage inequality; wage share; labour share; bottom 99% (search for similar items in EconPapers)
JEL-codes: D33 E25 J31 (search for similar items in EconPapers)
Date: 2013-10
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:auu:dpaper:685

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