Limited access Past event
Department of Economics Seminar with Professor James Banks, University of Manchester Unpacking income inequality: A transatlantic comparison over thirty years
Abstract: The evolution of labor market and disposable income inequalities over recent decades in high-income countries has generated intense interest in academia, policymaking and the wider public. In this multi-coauthor project and paper we build new data that provide the basis for consistent comparisons across 17 North American and European countries over the last thirty years. We study inequalities at all different stages of the income process, beginning with individual market wages and ultimately ending up with household disposable incomes. We test for convergence across countries at each of those stages and show how much of any convergence is due to changes in ‘pre-tax' inequalities as opposed to changes in redistribution. Individual characteristics are key, such as education, household structures and the number and gender of workers in households. Therefore we control for cross-country differences in these demographics in our assessment of convergence in wage, earnings and disposable income inequality, and we also study the gender earnings gap across the distribution.