Labour Market Institutions and the Personal Distribution of Income in the OECD

38 Pages Posted: 7 Jun 2010

See all articles by Daniele Checchi

Daniele Checchi

Università degli Studi di Milano - Dipartimento di Economia Politica e Aziendale (DEPA); IZA Institute of Labor Economics; IRVAPP

Cecilia García-Peñalosa

Aix-Marseille University

Multiple version iconThere are 2 versions of this paper

Abstract

A large literature has studied the impact of labour market institutions on wage inequality, but their effect on income inequality has received little attention. This paper argues that personal income inequality depends on the wage differential, the labour share and the unemployment rate. Labour market institutions affect income inequality through these three channels, and their overall effect is theoretically ambiguous. We use a panel of OECD countries for the period 1960–2000 to examine these effects. We find that greater unionization and greater wage bargaining coordination have opposite effects on inequality, implying conflicting effects of greater union presence on income inequality.

Suggested Citation

Checchi, Daniele and García-Peñalosa, Cecilia, Labour Market Institutions and the Personal Distribution of Income in the OECD. Economica, Vol. 77, Issue 307, pp. 413-450, July 2010, Available at SSRN: https://ssrn.com/abstract=1620644 or http://dx.doi.org/10.1111/j.1468-0335.2009.00776.x

Daniele Checchi (Contact Author)

Università degli Studi di Milano - Dipartimento di Economia Politica e Aziendale (DEPA) ( email )

Milan, 20122
Italy
+39 02 5032 1519 (Phone)
+39 02 5032 1505 (Fax)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

IRVAPP ( email )

Via Santa Croce 77
Trento, I-38122
Italy

Cecilia García-Peñalosa

Aix-Marseille University ( email )

3 Avenue Robert Schuman
3 Avenue Robert Schuman,
Aix-en-Provence, 13628
France

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
1
Abstract Views
548
PlumX Metrics