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2019•Archives of Business ResearchOpen access

Income Inequality and Labor Share in U.S.A and Canada

Sadequl Islam, Mohammad Safavi .

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Abstract

In recent years, in many countries, income inequality has increased while the labour share of income has declined. Using the Standardized World Income Inequality Database, we examine if income inequality, measured by the GINI Index, is related to the labor share of income in the U.S. and Canada. The paper uses time series regressions for the 1981–2011 period. Although apparently correlated, regression results confirm that declines in the labor income share have not had significant effects on income inequality.

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In recent years, in many countries, income inequality has increased while the labour share of income has declined. Using the Standardized World Income Inequality Database, we examine if income inequality, measured by the GINI Index, is related to the labor share of income in the U.S. and Canada. The paper uses time series regressions for the 1981–2011 period. Although apparently correlated, regression results confirm that declines in the labor income share have not had significant effects on income inequality.

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Available abstract

In recent years, in many countries, income inequality has increased while the labour share of income has declined. Using the Standardized World Income Inequality Database, we examine if income inequality, measured by the GINI Index, is related to the labor share of income in the U.S. and Canada. The paper uses time series regressions for the 1981–2011 period. Although apparently correlated, regression results confirm that declines in the labor income share have not had significant effects on income inequality.

Key concepts: Economic inequality, Economics, Inequality, Income distribution, Income inequality metrics, Index (typography), Demographic economics, Labour economics

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