Is inequality a political choice? av

June 24th, 2009

Is economic inequality the result of conscious policy choices? Or are growing inequalities the inevitable by-product of international trade, economic growth, structural changes in the economy, demographic changes, or other factors outside the scope of politics? By examining the effects of non-political forces on government redistribution of income within 16 OECD countries in the 1980-2000 period, this paper concludes that although international trade appears to reduce redistribution, high degrees of unionization maintain a significant positive impact. Of the parameters included in this study unionization and international trade appears to have the strongest effects on government inequality reduction, statistically significant even when controlling for fixed country- and year effects (Linear Mixed Model analysis). However, the data is inconclusive with respect to government partisanship’s effect on redistribution, and indicates that minority governments tend to reduce inequalities significantly more than majority governments. The paper ends with a remark about the need to separate empirical and normative arguments in studies of economic inequality.

Is equality a political choice?


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