Decomposing income inequality into factor income components evidence from selected G20 countries

Uma Rani and Marianne. Furrer

ILO Working Papers from International Labour Organization

Abstract: Income inequality has been rising in a number of countries in recent years and has been a growing concern. The total income of high-income households has increased faster than that of low-income households in a number of countries. Similarly, the wage gap between the top 10 per cent and bottom 10 per cent of wage earners has also widened. This paper investigates the factors that have contributed to the level of inequality and its changes over time in 13 selected G20 countries in order to address this issue at the policy level. The results show that labour income is the most powerful factor contributing to inequality in all countries under analysis. Transfers and benefits are the most important factors contributing to reducing inequality, but these alone cannot address the issue of rising inequalities in countries where unemployment continues to be high, which requires intervention in the labour markets. Furthermore, the paper also analyses the factors that contributed to the rise in labour income inequality and the results show that employment status and education are important factors contributing to inequality in the majority of the countries, though age, sex and industry group are also contributing to inequality in some countries.

Keywords: income distribution; wages; social protection.; incomes policy (search for similar items in EconPapers)
Pages: 1 online resource (41 p.) pages
Date: 2016
References: Add references at CitEc
Citations: View citations in EconPapers (24)

Published in ILO research paper series

Downloads: (external link)
https://ilo.userservices.exlibrisgroup.com/view/de ... NST/1242593900002676 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ilo:ilowps:994930893002676

Access Statistics for this paper

More papers in ILO Working Papers from International Labour Organization Contact information at EDIRC.
Bibliographic data for series maintained by Vesa Sivunen ().