Income Distribution And Poverty In Selected Oecd Countries

This report provides evidence of a fairly generalised increase in income inequality over the past two decades across OECD countries, but the timing, intensity and causes of the increase differ from what is typically suggested in the media.

This study examines developments in the distribution of disposable income and poverty for 13 OECD countries over the past one to two decades. It finds that income inequality and poverty have increased in about half of the countries. However, the widening in the distribution of market income has been more pronounced and more widespread across countries, reflecting both earnings, capital and self-employment incomes. While widening wage rates have played a role in explaining earnings developments, the increasing share of households with no workers has also been important. The tax and transfer system has contained or, at least, partly offset the widening in the distribution of market income. Transfer payments have been particularly important at the bottom of the income distribution as they increasingly replaced lost earnings. Households of retirement age appear to have benefited, on average, the most net taxes and transfers.

This book provides a comprehensive review of income inequality issues in the OECD in a cross-country setting. It presents a wealth of data and analysis on the formation of inequality and identifies groups of countries that share similar inequality patterns. It also reviews developments at the extremes of the income distribution, namely poverty, top incomes as well as the distribution of wealth. An important contribution of the book is the careful examination of the determinants of the income distribution, such as globalisation and technical progress as well as the effect of a wide range of economic policies that shape the distribution of income. These include in particular labour market regulations, household taxes and transfers as well as in-kind public services. It also sheds light on an under-researched issue: do policies aimed at boosting economic growth raise or reduce income inequality

Income inequality is rising. A quarter of a century ago, the average disposable income of the richest 10% in OECD countries was around seven times higher than that of the poorest 10%; today, it's around 9½ times higher. Why does this matter? Many fear this widening gap is hurting individuals, societies and even economies. This book explores income inequality across five main headings. It starts by explaining some key terms in the inequality debate. It then examines recent trends and explains why income inequality varies between countries. Next it looks at why income gaps are growing and, in particular, at the rise of the 1%. It then looks at the consequences, including research that suggests widening inequality could hurt economic growth. Finally, it examines policies for addressing inequality and making economies more inclusive.

This book explores income inequality across five main headings. It starts by explaining some key terms in the inequality debate. It then examines recent trends and explains why income inequality varies between countries.

Adjustment programs will fail when they do not recognize the interdependence of the three criteria of efficiency, welfare, and political feasibility. These programs must be tailored to both the political and economic environments of each country.