It is widely thought that among the countries in the Organisation for Economic Co-operation and Development (OECD), income inequality has become more widespread over the past decades. The authors show that this image is misleading. The OECD countries remain more diverse in their distributions of labor earnings and disposable income than they are in their distributions of market income. The larger and persistent cross-national variation in the distributions of work-related earnings and disposable income is attributable to the role of political actors (such as unions and political parties) as well as economic institutions. The way in which political parties are able to pursue their goals varies across forms of income. Political parties' capacities to shape the distribution of labor earnings is contingent on the degree of wage-bargaining coordination. In turn, political parties directly affect the distribution of disposable income through their choices about fiscal instruments.
Alesina, A., and E. Glaeser.2004. Fighting poverty in the US and Europe: A world of difference. Oxford, UK: Oxford University Press.
2.
Atkinson, A.B.1999. Is rising income inequality inevitable? A critique of the transatlantic consensus. WIDER Annual Lectures 3, United Nations University. http://www.wider.unu.edu/publications/annual-lectures/en_GB/AL3/_files/78091860858047082/default/annual-lecture-1999.pdf .
3.
Atkinson, A., and A. Brandolini.2003. The panel-of-countries approach to explaining income inequality: An interdisciplinary research agenda. Unpublished manuscript , Oxford University.
4.
Barro, R., and J. Lee.2000. International data on educational attainment: Updates and implications. CID Working Paper No. 42. Cambridge, MA: Harvard University, Center for International Development .
5.
Bartels, L.2003. Partisan politics and the US income distribution. Unpublished manuscript, Department of Political Science, Princeton University.
6.
Beck, T., A. Demirgüç-Kunt, and R. Levine.2000. A new database on financial development and structure. World Bank Economic Review14:597-605.
7.
Benjamin, D., M. Gunderson, and W.C. Riddell.1998. Labor market economics. New York: McGraw-Hill.
8.
Beramendi, P.2001. The politics of income inequality in the OECD: The role of second order effects. Luxembourg Income Study Working Paper 284. http://www.lisproject.org/publications/liswps/284.pdf.
9.
Beramendi, P., and C. Anderson , eds. 2008. Democracy, inequality, and representation . New York: Russell Sage.
10.
Blau, F., and L. Kahn.2000. Gender differences in pay. Journal of Economic Perspectives14 (4): 75-99.
11.
Bradley, D., E. Huber, S. Moller, F. Nielsen, and J.D. Stephens.2003. Distribution and redistribution in postindustrial democracies. World Politics55:193-228.
12.
Cusack, T., and P. Beramendi.2006. Taxing work. European Journal of Political Research45 (1): 45-73.
13.
Cusack, T., and L. Engelhardt.2002. The PGL file collection: File structures and procedures. Unpublished manuscript, Wissenschaftszentrum Berlin für Sozialforschung.
14.
Esping-Andersen, G.1990. The three worlds of welfare capitalism. Princeton, NJ: Princeton University Press.
15.
Freeman, R.1980. Unionism and the dispersion of wages. Industrial and Labor Relations Review34:3-23.
16.
Ganghof, S.2004. Progressive income taxation in advanced OECD countries. Revisiting the structural dependence of the state on capital. Unpublished manuscript, Max Plank Institute, Cologne , Germany.
17.
Gottschalk, P., and T. Smeeding.1997. Crossnational comparisons of earnings and income inequality. Journal of Economic Literature35:633-86.
18.
---. 2000. Empirical evidence on income inequality in industrial countries. In Handbook of income distribution, ed. A. B. Atkinson and F. Bourguignon.New York: Elsevier.
Hall, P., and D. Gingerich.2001. Varieties of capitalism and institutional complementarities in the macroeconomy. Unpublished manuscript, Harvard University.
21.
Hall, P., and D. Soskice.2001. Introduction. In Varieties of capitalism, ed. P. Hall and D. Soskice.Oxford, UK: Oxford University Press.
22.
Hibbs, D.1977. Political parties and macroeconomic policy. American Political Science Review71 (4): 1467-87.
23.
---. 1991. Market forces, trade union ideology and trends in Swedish wage dispersion. Acta Sociologica34:89-102.
24.
Hibbs, D., and D. Dennis.1988. Income distribution in the United States . American Political Science Review82 (2): 467-90.
25.
Hicks, A., and D. Swank.1984. Government redistribution in rich capitalist democracies. Policy Studies Journal10:264-87.
26.
Huber, E., and J. Stephens.2001. Development and crisis of the welfare state. Chicago: University of Chicago Press.
27.
Iversen, T.2006. Capitalism, democracy, and welfare. Cambridge: Cambridge University Press.
28.
Iversen, T., and D. Soskice.2006. Electoral institutions and the politics of coalitions: Why some democracies redistribute more than others. American Political Science Review100 (2): 165-81.
29.
Iversen, T., and A. Wren.1998. Equality, employment and budgetary restraint: The trilemma of the service economy. World Politics50:507-56.
30.
Kenworthy, L.2001. Wage-setting measures: A survey and assessment. World Politics54: 57-98.
31.
Kenworthy, L., and J. Pontusson.2005. Rising inequality and the politics of redistribution in affluent countries. Perspectives on Politics3:449-71.
32.
Korpi, W.1983. The democratic class struggle. New York: Routledge.
33.
---. (2000) Faces of inequality: Gender, class, and patterns of inequalities in different types of welfare states. Social Politics7 (2): 127-91.
34.
Kuznets, S.1955. Economic growth and income inequality. American Economic Review45 (1): 1-28.
35.
Lange, P., and G. Garrett.1985. The politics of growth: Strategic interaction and economic performance, 1974-1980. Journal of Politics47:792-82.
36.
Mares, I.2003. The politics of social risks. Cambridge : Cambridge University Press.
37.
Mendoza, E., A. Razin, and L.L. Tesar.1994. Effective tax rates in macroeconomics: Cross-country estimates of tax rates on factor incomes and consumption. Journal of Monetary Economics34 (3): 297-323.
38.
Organisation for Economic Co-operation and Development.1996. OECD employment outlook 1996-Countering the risks of labour market exclusion. Paris: Organisation for Economic Co-operation and Development.
39.
Phillips, K.2002. Wealth and democracy. New York: Broadway Books.
40.
Pontusson, J., D. Rueda, and C. Way.2002. Comparative political economy of wage distribution. British Journal of Political Science33:281-308.
41.
Przeworski, A., and M. Wallerstein.1988. The structural dependence of the state on capital. American Political Science Review82 (1): 11-29.
42.
Rebitzer, J.B., and L.J. Taylor.1995. The consequences of minimum wage laws: Some new theoretical ideas. Journal of Public Economics56:245-55.
43.
Rueda, D.2004. Political agency and institutions: Explaining the influence of left government and wage bargaining on inequality. Unpublished manuscript , Binghamton University.
44.
Rueda, D., and J. Pontusson.2000. Wage inequality and the varieties of capitalism. World Politics52 (3): 350-83.
45.
Swenson, P., and J. Pontusson.2000. The Swedish employer offensive against centralized bargaining. In Unions, employers and central banks , ed. T. Iversen, J. Pontusson, and D. Soskice.Cambridge, UK: Cambridge University Press.
46.
Wallerstein, M.1999. Wage-setting institutions and pay inequality in advanced industrial societies. American Journal of Political Science43 (3): 649-80.
47.
Wallerstein, M., M. Golden, and P. Lange.1997. Unions, employers associations and wage-setting institutions in northern and central Europe, 1950-1992. Industrial and Labor Relations Review50 (3): 379-401.
48.
Wallerstein, M., and K. Moene.2003. Earnings inequality and welfare spending: A disaggregated analysis. World Politics55:485-517.
49.
Wallerstein, M., and A. Przeworski.1995. Capital taxation with open borders. Review of International Political Economy2:425-45.
50.
Wood, A.1995. North-South trade, employment, and inequality: Changing fortunes in a skill-driven world. Oxford, UK: Clarendon.
