The Effects of Wealth and Gender Inequality On Economic Growth: A Survey of Recent Empirical Studies

Abstract

One objective of the International Institute for Studies' Decent Work research programme is to evaluate whether and how there are trade-offs or complementarities among the four Decent Work pillars: fundamental rights at work, employment and income opportunities, social dialogue, and social protection. Within this broader objective is a focus on the effects of fundamental rights at work on employment and income opportunities. One component of this was the construction of country-level indicators of fundamental right s at work. Qualitative indicators were constructed by coding textual sources, and quantitative indicators were derived from more readily available data sources. These indicators address aspects of freedom of association and collective bargaining, child labour, forced labour, and discrimination and inequality in employment and occupation. qualitative indicators were constructed for the 1990s but are more difficult to construct for earlier years, given the poorer quality or outright unavailability of key textual sources. These indicators can be useful in the analysis of those aspects of employment and income opportunities that lend themselves to study via contemporaneous cross-country econometric models. For instance, a study was undertaken that addressed the effects of fundamental rights at work on labour cost s and flows of foreign direct investment (Kucera, 2001). But given their limited availability over time, these indicators are not useful in addressing aspects of employment and income opportunities for which one must consider more long-run variation. Key among these aspects of employment and income opportunities is economic growth. Economic growth is generally defined as an increase in per capita national income, that is, average income per person in a country. This definition holds for all the studies surveyed in this paper. Economic growth should thus be central to considerations of employment and income opportunities. As such, it was thought useful to undertake a series of papers that could shed light on the effects of fundamental worker rights and core labour standards on economic growth. first of these papers was a literature survey by Galli titled The Economic Impact of Child Labour (2001). Following along these lines, the present paper provides a survey of recent macro-econometric studies on the effects on growth of wealth inequality (as indicated by income and land distribution) and gender inequality in education and earnings.