Date: 2022
Type: Article
Financialization, labor market institutions and inequality
Review of international political economy, 2022, Vol. 29, No. 2, pp. 425-452
HUBER, Evelyne, PETROVA, Bilyana, STEPHENS, John, Financialization, labor market institutions and inequality, Review of international political economy, 2022, Vol. 29, No. 2, pp. 425-452
- https://hdl.handle.net/1814/69806
Retrieved from Cadmus, EUI Research Repository
The last three decades have witnessed rising inequality and deepening financialization in post-industrial democracies. A rapidly growing literature has linked these two phenomena. We go beyond existing scholarship by specifying which aspects of financialization can be expected to increase inequality and where in the income distribution this effect will occur. We also show that this effect is contingent on institutional context. We posit that the shareholder model of corporate governance and the growing demand for financial professionals are the two dimensions of financialization that drive up pre-tax income inequality. Nevertheless, the spread of the shareholder value model only benefits the very top income earners. We further argue that the institutional strength of labor shapes the relationship between financialization and inequality. We analyze effects of indicators of these two dimensions of financialization on the top 1% and the next 9% income shares and on the 90:50 earnings ratio. We test our hypotheses with data on 18 post-industrial democracies between 1960 and 2015.
Additional information:
Published online: 27 August 2020
Cadmus permanent link: https://hdl.handle.net/1814/69806
Full-text via DOI: 10.1080/09692290.2020.1808046
ISSN: 0969-2290; 1466-4526
Publisher: Routledge
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