Report
Patrick Artus

Are there OECD countries that avoid the choice between low structural unemployment and low inequality?

It is feared that OECD countries may be faced with the following choice: Either they choose to have low structural unemployment, but then low-skilled wages must be low, and income inequality and poverty are high; if they correct income inequality through large-scale redistributive policies, they inevitably have a high tax burden that drives up structural unemployment; there is therefore high income inequality both before and after redistribution; Or they choose to have low income inequality and a low poverty rate; they then have a high level of low incomes, either through wages or through redistribution, which destroys low-skilled employment and leads to high structural unemployment. It therefore seems impossible to have both low structural unemployment and low income inequality or a low poverty rate. But are there countries that escape this curse, and why? The answer is yes, and these countries are characterised by high productivity gains and strong skills among the population. They are Sweden, the Netherlands, Austria, Germany, Denmark and Switzerland .
Provider
Natixis
Natixis

Based across the world’s leading financial centers, Natixis CIB Research offers an integrated view of the markets. The team provides support to inform Natixis clients’ investment and hedging decisions across all asset classes.

 

Analysts
Patrick Artus

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