Income inequality in corporatist and liberal economies: a comparison of trends within OECD countries

Abstract

This paper examines trends in income distribution since the war in a number of OECD economies. It is shown that while most economies during the first two decades experienced decreasing income inequality, associated with the post-war boom, there has been considerable divergence thereafter. In this process the institutions of each country have mattered a great deal. By examining both liberal and corporatist economies we seek to delineate the links between economic performance and restructuring, and income inequality. The evidence is that, in contrast to the experience of liberal economies, the more corporatist economies have been able to adjust to the worsening economic climate without an increase in income inequality.