Report
Patrick Artus

What accounts for primary income inequality (before redistribution)?

The generosity of redistributive policies differs markedly across OECD countries, which alters the ranking of income inequality after redistribution. But an economy’s structural problems show up in income inequality before redistribution. What causes this form of inequality? Income distribution between wages and profits (which determines the level of capital income and reveals the level of wages at the bottom of the distribution); The employment rate (a low employment rate reveals a large share of the population without access to employment and with low income); Labour force skills (weak skills can lead to a large number of low-skilled, low-paid jobs); The weight of industry (a large industry generates many intermediate jobs, which reduces income inequality). Statistical analysis of OECD countries shows that income inequality before redistribution is related to income distribution, employment rates and skills .
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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