Analyzing rising income inequality

A study examines trends in rising income inequality across the globe. Researchers have documented rising income inequalities in several high-income countries. However, the relationship between workplace dynamics and rising income inequality remains unclear. Donald Tomaskovic-Devey and colleagues analyzed administrative records from 1993 to 2013 pertaining to more than 2 billion employment periods in 14 high-income countries in Asia, Europe, and North America. The authors found that income inequality rose, particularly in the private sector, in every country analyzed except Canada and Hungary, suggesting that restructuring of firms is a general driver of earning dispersions. Both Canada and the United States exhibited high levels of income inequality and almost no institutional employment protection, whereas several Scandinavian countries began with strong protection that declined over time and low income inequality that increased over time. Rising between-workplace inequality occurred when firms with powerful market positions simultaneously outsourced production and services to temporary labor firms, subcontractors, global supply chains, franchisees, independent contractors, and other low-wage firms. The findings suggest that enacting policies to protect and increase the bargaining power of low-skilled workers as well as limiting firms’ outsourcing ability may help reduce income inequality, according to the authors.

Article #19-18249: “Rising between-workplace inequalities in high-income countries,” by Donald Tomaskovic-Devey et al.

MEDIA CONTACT: Donald Tomaskovic-Devey, University of Massachusetts Amherst, MA; email:

[email protected]

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