The Effects of Competition Law on Inequality – Incidental By-Product or a Path for Societal Change?
CCLP(L)55 Working Paper, 2021
29 Pages Posted: 2 Jul 2021
Date Written: June 19, 2021
Rising economic inequality presents society with unprecedented challenges. Direct instruments designed to address these worrying trends have often under performed. As a result, we find ourselves on a potentially dangerous and unsustainable path. In this paper we explore whether, in parallel to other efforts to mitigate the rise of inequality, there can be a role for competition law to play in the quest to reduce the widening inequality gap. We begin by outlining the possible relationship between competition law enforcement, market power, and economic inequality. We supplement the theoretical discussion with a review of our empirical analysis of these linkages. We look at macro and micro data and emphasize the role of labor compensation as a key mechanism which links competition law enforcement, competition dynamics and economic inequality. With this in mind, we then reflect on the policy implications and possible means to utilize competition enforcement in a manner that would reduce economic inequality.
Keywords: Competition Policy and Law, Inequality, Labour Share, Empirical Legal Studies
Suggested Citation: Suggested Citation