Documents Braconier, Henrik 3 results

"Income and earning inequality has been on the rise in most of the OECD and in many emerging economies since the 1980s. This paper estimates a model of earnings inequality across OECD countries that incorporates determinants of relative demand and supply of more and less-skilled labour. Drawing on OECD data we find that skill-biased technological change – measured as a common cross-country time trend and the level of multi factor productivity – has been the key driver in increasing earning differentials. The analysis also shows that educational attainment has mitigated the impact of skill-biased technological change on earning differentials, but has in most countries been unable to fully compensate. In line with previous OECD analysis, changes in structural policies and labour market institutions, such as deregulation of product and labour markets have exerted upward pressure on inequality. The estimated model is used to decompose historical changes in earning differentials and to construct forward looking scenarios up to 2060. If the common cross-country trend of skill-biased technological change observed during the last 25 years prevails, earning differentials will on average increase by almost 30% in the OECD by 2060. Finally, the model is used to simulate the consequences of alternative policy scenarios over the coming 50 years."

"This paper identifies and analyses some key challenges that OECD and partner economies may face over the coming 50 years if underlying global trends relating to growth, trade, inequality and environmental pressures prevail. For example, global growth is likely to slow and become increasingly dependent on knowledge and technology, while the economic costs of environmental damages will mount. The rising economic importance of knowledge will tend to raise returns to skills, likely leading to further increases in earning inequalities within countries. While increases in pre-tax earnings do not automatically transform into rising income inequality, the ability of governments to cushion this impact may be limited, as rising trade integration and consequent rising mobility of tax bases combined with substantial fiscal pressures may hamper such efforts. The paper discusses to what extent national structural policies can address these and other interlinked challenges, but also points to the growing need for international coordination and cooperation to deal with these issues over the coming 50 years."