Institutional quality and income inequality in the advanced countries

In: Panoeconomicus: naučno-stručni časopis Saveza Ekonomista Vojvodine ; scientific-professional journal of Economists' Association of Vojvodina, Band 64, Heft 2, S. 169-188

Abstract

The purpose of this paper is to shed more light on the effects of changes in
quality of economic, legal and political institutions on income inequality
in the advanced countries over the last two decades. Using the robust panel
model on a sample of 21 OECD countries, it is found that the impact of
elitization of society is more pronounced than the impact of unionization on
income redistribution, but both effects are less expressed in comparison to
the influence of institutional changes on redistribution. In a globalized
economy, insufficient redistribution and high inequality might be
interpreted as the consequence of institutional inertia to disruptive
technological and business changes.