THE DRIVERS OF LABOR INCOME INEQUALITY — A LITERATURE REVIEW

Abstract

Despite a general trend of increasing labor income inequality, there have been differences in the timing, intensity and even direction of these changes across OECD countries. These stylized facts have led to numerous studies about the main determinants of labor income inequality and, as a result, a significant revision of the previous consensus about the key drivers. The most researched channels include skill-biased technological change, international trade, immigration, education as well as the role of labor market policies and institutions.