Report
Patrick Artus

Must wage earners be made poorer to increase the employment rate?

Does an increase in the employment rate require poor wage earners , the creation of low-wage services jobs and therefore an increase in inequality? To try to answer this question, we compare OECD countries and seek to determine : The sign of the correlation between the employment rate and income inequality before redistribution . If the sign is negative, it is because a low em ployment rate increase s inequality; if the sign is positive, then creating low-wage jobs (which increases inequality) is conducive to an increase in the employment rate. The correlation is clearly negative; The variables that are correlated with the employment rate : l abour force skills, the weight of corporate social contributions, but also the trend in income distribution? (Does income distribution have to be skewed against wage earners to increase the employment rate?) The trend in income distribution does not seem to have a significant effect on the employment rate. Altogether, it does not seem necessary to make wage earners poorer or increase inequality in order to raise the employment rate.
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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