Impact of Economic Growth on Income Inequalities
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How does income inequality affect economic growth?
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By contrast, employment growth is found to have had an equalising impact, benefiting mostly and importantly households in the lower part of the income distribution Chart 1, Panel B. Overall, these two forces have tended to offset each other and resulted in a broadly distribution-neutral impact of GDP per capita growth, on average across OECD countries over the last three decades.
So, with reducing inequality remaining a defining challenge of the post-crisis era, promoting job creation is a key policy goal, in particular where employment rates still fall short of pre-crisis levels. But, perhaps more importantly, in looking for ways to revive productivity growth, governments need comprehensive policy strategies to ensure that the gains are more broadly shared across the population. Barro, R.
Hermansen, M. Ruiz and O.
Dollar, D. Kleineberg and A. References Barro, R. Like this: Like Loading