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"This study addresses the central question in political economy how the objectives of attaining economic growth and restricting income inequality are related. Thus far few studies explicitly distinguish between effects of income inequality as such and effects of redistributing public interventions to equalize incomes on economic growth. In fact, most studies rely on data that do not make this distinction properly and in which top-coding is applied so that enrichment at the top end of the distribution is not adequately captured. This study aims to contribute using a pooled time-series cross-section design covering 29 countries, using OECD, LIS, and World Top Income data. No robust association between inequality and growth or redistribution and growth is found. Yet there are signs for a positive association between top incomes and growth, although the coefficient is small and a causal interpretation does not seem to be warranted." (Author's abstract, IAB-Doku) ((en))

Technological change is widely considered to be a key driver of the economic and occupational structure of affluent countries. Current advances in information technology have led to a significant substitution of routine work by capital, while occupations with abstract or interpersonal manual task structures are complemented or unaffected. We develop a simple theoretical framework for the reasons why individuals in routine task-intensive occupations would prefer public insurance against the increased risk of future income loss resulting from automation. Moreover, we contend that this relation will be stronger for richer individuals who have more to lose from automation. We focus on the role of occupational elements of risk exposure and challenge some general interpretations of the determinants of redistribution preferences. We test the implications of our theoretical framework with survey data for 17 European countries between 2002 and 2012. While up to now the political economy literature has emphasized other occupational risks, we find vulnerability to automation to be an important determinant of the demand for redistribution that should not be ignored.

AbstractAlthough long‐term processes of welfare state development have been investigated frequently, there is a surprising gap in knowledge on short‐term reactions of states to sudden events. This article aims to fill this gap by examining the reactive policies, i.e. immediate policy responses to urgent social matters, of governments to the current economic crisis. We focus on social and unemployment policies of the three welfare regime ideal types of Esping‐Andersen's typology, namely Germany, the UK and Sweden. We apply long‐term policy development theories, most notably the convergence and path dependence theories, to understand the choices made in the different reactive policy strategies of these countries. In addition, we scrutinize whether we find similarities between the reactive policies and the converging structural welfare state developments. We use comparable data from various European and national data sources for the two years directly following the recent crisis, namely 2008 and 2009. Our analysis shows that, at least for the three countries under investigation, countries seem to have fallen back on 'old habits' by adopting social and unemployment reactive policies that can be identified based on their institutional legacies. This suggests that reactive policy strategies can be explained by different dynamics than the more structural long‐term policy developments, and in our case we find evidence in support for the path dependence theory.

China's rapid rise on the global economic stage has substantial and unequal employment effects in advanced industrialized democracies given China's large volume of low-wage labor. Thus far, these effects have not been analyzed in the comparative political economy literature. Building on pooled time-series data, we analyze the effects of Chinese trade competition across 17 sectors in 18 countries. We devote attention to a new channel, increased competition from China in foreign export markets. Our empirical findings reveal overall employment declines in sectors more exposed to Chinese imports. Furthermore, our results suggest that employment effects are not equally shared across skill levels, as the share of hours worked worsens for low-skilled workers.

The rapid rise of China on the global economic stage could have substantial and unequal employment and wage effects in advanced industrialised democracies given China's large volume of low-wage labour. Thus far, these effects have not been analysed in the comparative political economy literature. Building on new pooled time-series data, we analyse the effects of Chinese trade competition across 17 sectors in 18 countries between 1990 and 2007. Our empirical findings reveal overall employment declines and higher earnings inequality in sectors more exposed to Chinese imports. We devote particular attention to a new channel, increased competition from China in 59 foreign export markets, which positively affects the high-skilled whilst the low-skilled bear the brunt. Hence, this study shows that neglecting the competition in foreign countries leads to underestimation of the distributive effects of trade. More generally, our findings provide new insights into how international trade, technological change, and labour market institutions contribute to the widely observed trend of rising inequality.

Generating rising prosperity for middle-income households is now seen as a fundamental challenge for rich countries: when countries with similar institutional settings are grouped together, can a best-performing model in those terms be identified? This paper investigate how countries, and models or regimes, compare with respect to growth in real household incomes at the median, drawing on data from the two main comparative sources containing that information over recent decades, the Luxembourg Income Study and the OECD Income Distribution Database. It finds remarkably wide variation across OECD countries in recent decades in that respect, but this variation is also seen within the liberal and coordinated market economy models distinguished in the 'varieties of capitalism' literature, as well as within the welfare regimes commonly employed in welfare state analysis, with little difference between them in average growth rates. This remains true when one focuses on working-age households only. The average absolute increase in median income in real terms over time differs a great deal across countries but very much less across these economic models or regimes; the level attained at the most recent year for which data is available is also quite similar across the liberal and coordinated economies and across the social democratic, liberal and corporatist welfare regimes, with the Mediterranean and post-socialist countries/regimes then lagging behind. Many countries have seen growth in the median vary considerably over time, and understanding that variation may be more promising than the search for a consistently best-performing model.