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

Ilhan Dögüs ()

PSL Quarterly Review, 2018, vol. 71, issue 284, 41-59

Abstract: The paper argues that wage dispersion between white-collar and blue-collar workers has caused the rise and expansion of pension funds in a direct and long-run structural manner in the USA. Using data from the Saez-Zucman and the St. Louis Fed’s FRED datasets, the argument is empirically analysed on yearly data for the period 1964-2012 in the USA. The results confirm the existence of a long-run relationship of causality from wage dispersion to the share of pension funds within US households’ financial wealth. Applying a vector error correction model to the data it emerges that the variance in pension funds due to wage dispersion starts to rise after the fifth period, and reaches 69% in the tenth period.

Keywords: financialisation; pension funds; wage dispersion; savings (search for similar items in EconPapers)
JEL-codes: J31 D14 E44 (search for similar items in EconPapers)
Date: 2018
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