The distribution of earnings in OECD countries


  • Anthony B. ATKINSON

    1. Nuffield College, Oxford. This article is based on the DeBenedetti Lecture given at Boc-coni University, Milan, March 2006 and Atkinson (forthcoming). I am most grateful to Tito Boeri, who invited me to give the Lecture, and to those who helped assemble the data used here: Jeff Borland, Andrea Brandolini, Rob Bray, Sylvia Dixon, Brian Easton, Magnus Gustavsson, Andrew Leigh, Erik Liljegren, Antti Katainen, John Micklewright, Carlos Farinha Rodrigues, and Peter Saunders. I began the research while holding the Jelle Zijlstra Professorship at the Netherlands Institute for Advanced Studies; the Lecture was written while I was visiting the Economic Research Department of the Bank of Italy; this paper was completed while I held the Chaire Blaise Pascal at the Ecole d'Economie de Paris. I thank all these institutions for their hospitality, while making clear that none of those named above are responsible for the views expressed.
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Earnings inequality in the OECD countries is commonly seen to have widened considerably since 1980 - and this is generally explained by the steady increase in relative demand for skilled labour due to skill-biased technical change and the growing exposure of unskilled workers to international competition through globalization. But this single explanation now looks questionable: the increase in inequality has been uneven across countries, and greater earnings dispersion has mostly been occurring at the top of the distribution. This article takes a fresh look at the evidence and considers alternative explanations to supplement that provided by the race between technology and education.