Exploding wealth inequality in the United States

Emmanuel Saez, Gabriel Zucman 28 October 2014

a

A

There is no dispute that income inequality has been on the rise in the US for the past four decades. The share of total income earned by the top 1% of families was less than 10% in the late 1970s, but now exceeds 20% as of the end of 2012 (Piketty and Saez 2003). A large portion of this increase is due to an upsurge in the labour incomes earned by senior company executives and successful entrepreneurs. But is the rise in US economic inequality purely a matter of rising labour compensation at the top, or did wealth inequality rise as well?

a

A

Topics:  Poverty and income inequality

Tags:  wealth inequality, wage inequality, Inequality

Offshoring and skill-biased technical change

Daron Acemoglu, Gino Gancia, Fabrizio Zilibotti 30 September 2014

a

A

Offshoring, the demand for skill, and biased innovations

The rapid rise of offshoring has been one of the most visible trends in the US labour market over the last three decades. Despite its prevalence, the implications for wages and skill premia are still debated (see, for instance, Grossman and Rossi-Hansberg 2008 and Baldwin and Robert-Nicoud 2014).

a

A

Topics:  International trade Labour markets Poverty and income inequality Productivity and Innovation

Tags:  offshoring, skill-biased technical change, Inequality, wages, technological progress, innovation

Finance sector wages: explaining their high level and growth

Joanne Lindley, Steven McIntosh 21 September 2014

a

A

Individuals who work in the finance sector enjoy a significant wage advantage. This wage premium has received increasing attention from researchers following the financial crisis, with focus being put onto wages at the top of the distribution in general, and finance sector wages in particular (see Bell and Van Reenen 2010, 2013 for discussion in the UK context). Policymakers have also targeted this wage premium, with the recent implementation of the Capital Requirements Directive capping bankers’ bonuses at a maximum of one year of salary from 2014.

a

A

Topics:  Financial markets Microeconomic regulation

Tags:  Bankers’ bonuses, banking, wages, Inequality, UK, regulation, asymmetric information, Executive compensation, Finance, task-biased technological change, ICT

Endowments for war in 1914

Avner Offer 19 September 2014

a

A

World War I was a mistake. Its consequences were not part of anybody’s expectations (excepting Stead and Bloch 1899) – certainly not of those who set it off, although there was an undertone of fatalism in their decisions (Offer 1995). If one side had possessed an unassailable superiority, then there would have been no call for war. The war’s duration indicates that the sides were matched, that the outcome was uncertain, and that instigating war was therefore a colossal gamble – and, as it turned out, a bad one. The decisions for war were irresponsible, incompetent, and worse.

a

A

Topics:  Economic history Energy

Tags:  WWI, World War I, war, imperialism, nationalism, energy, Agriculture, technology, technological change, innovation, conscription, Inequality, rationing

Volatile top income shares in Switzerland? Reassessing the evolution between 1981 and 2009

Reto Foellmi, Isabel Martínez 31 August 2014

a

A

The evolution of inequality in income and wealth has attracted substantial attention in recent decades. Academics have been trying to capture the relation between distribution and growth patterns – most recently and prominently Piketty (2014) in his widely discussed book Capital in the Twenty-First Century. Research on income distributions has notably focused on the top of the earnings distribution, in particular because changes in the very top incomes account for a large part of overall inequality in quantitative terms.

a

A

Topics:  Europe's nations and regions Poverty and income inequality

Tags:  Switzerland, Inequality, income inequality, wealth inequality

Inheritance flows in Sweden, 1810–2010

Jesper Roine, Henry Ohlsson, Daniel Waldenström 08 August 2014

a

A

Thomas Piketty’s book Capital in the Twenty-First Century (Piketty 2014) has received enormous attention since its publication. A fundamental question raised is whether a person’s lifetime income is the result of his or her own efforts or, alternatively, founded on inheritance. Even for those who believe that inequality does not matter as long as it is based on one’s own effort, the potential of a return to high levels of inequality based on inheritance is a totally different matter. To many people, such a development would be much less acceptable than increased inequality per se.

a

A

Topics:  Economic history Europe's nations and regions Poverty and income inequality

Tags:  Sweden, Inequality, inheritance, wealth, capital, capital accumulation

Sourcing foreign inputs to improve firm performance

Maria Bas, Vanessa Strauss-Kahn 14 July 2014

a

A

Should trade policy fight or promote imports of intermediate inputs? While several studies have shown the recent increase in imports of intermediate goods, their role in shaping domestic economies is not yet completely understood. Following the work of Feenstra and Hanson (1996), a large literature focuses on the impact of imported intermediate inputs on employment and inequality. It concludes that, like outsourcing, imported intermediate inputs have a role (although limited) in explaining job losses and wage reductions.

a

A

Topics:  International trade

Tags:  employment, productivity, wages, Inequality, trade, exports, outsourcing, imports, global value chains, Intermediate inputs

Institutions, trade shocks, and regional differences in long-run educational and development trajectories

André Carlos Martínez, Aldo Musacchio, Martina Viarengo 09 July 2014

a

A

Understanding the determinants of long-run socio-economic development is a major concern for academics and policymakers in many countries around the world. In particular, beyond understanding differences in development or educational and other outcomes across countries, the origins of within-country inequality are now a fundamental issue, given the impact inequality has on the long-run prosperity of nations.

a

A

Topics:  Development Economic history Education

Tags:  development, education, growth, institutions, Inequality, Brazil, colonialism, trade shocks, extractive institutions

Globalisation, job security, and wages

Kerem Cosar, Nezih Guner, James R Tybout 07 July 2014

a

A

How does increased openness to international trade affect workers’ wages and job security? This question is central to the public debate concerning the effects of globalisation, but convincing quantitative answers have been difficult to come by. One fundamental reason is that major trade liberalisation episodes have often coincided with labour reforms (Heckman and Pages 2004). Colombia is a case in point. As Figure 1 shows, this country experienced deindustrialisation, higher job turnover rates, and heightened wage inequality in the years following its 1986–1991 trade liberalisation.

a

A

Topics:  International trade Labour markets

Tags:  productivity, unemployment, globalisation, wages, trade liberalisation, Inequality, labour market reforms, exports, Colombia, job security

Capital is not back: A comment on Thomas Piketty’s ‘Capital in the 21st Century’

Odran Bonnet, Pierre-Henri Bono, Guillaume Camille Chapelle, Étienne Wasmer 30 June 2014

a

A

The impressive success of Thomas Piketty’s book (Piketty 2014) shows that inequality is a great concern in most countries. His claim that “capital is back”, because the ratio of capital over income is returning to the levels of the end of the 19th century, is probably one of the most striking conclusions of his 700 pages. Acknowledging the considerable interest of this book and the effort it represents, we nevertheless think this conclusion is wrong, due to the particular way capital is measured in national accounts.

a

A

Topics:  Global economy

Tags:  house prices, housing, Inequality, rents, housing bubble, capital, wealth inequality

Pages

Events