Cover Staff Discussion Notes
Inequality and Labor Market Institutions
Author:
Ms. Florence Jaumottenull

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and
Ms. Carolina Osorio Buitron
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Series:
Staff Discussion Notes
Volume/Issue:
Volume 2015: Issue 014
Language:
English
Publication Date:
01 Jul 2015
DOI:
https://doi.org/10.5089/9781513577258.006
ISBN:
9781513577258
ISSN:
2617-6750
Pages:
30
Keywords:
SDN; income share; union density; union; Inequality; top income shares; unions; minimum wage; share statistics; political system; density need; least squares; income distribution; collective bargaining; Gini of gross income; Personal income; Income inequality; Labor market institutions; Income distribution; Minimum wages; Southern Europe
Legal-disclaimer:
Staff Discussion Notes (SDNs) showcase policy-related analysis and research being developed by IMF staff members and are published to elicit comments and to encourage debate.The views expressed in this Policy Discussion Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy.
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The SDN examines the role of labor market institutions in the rise of income inequality in advanced economies, alongside other determinants. The evidence strongly indicates that de-unionization is associated with rising top earners’ income shares and less redistribution, while eroding minimum wages are related to increases in overall income inequality. The results, however, also suggest that a lack of representativeness of unions may be associated with higher inequality. These findings do not necessarily constitute a blanket recommendation for higher unionization and minimum wages, as country-specific circumstances and potential trade-offs with other policy objectives need to be considered. Addressing inequality also requires a multipronged approach, which should include taxation reform and curbing excesses associated with financial deregulation.
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Cover Staff Discussion Notes
Staff Discussion Notes
ISSN:
2617-6750
Publisher:
International Monetary Fund
Volume 2015: Issue 014