Financialization and the Deepening of Inequalities

Boris COURNEDE

Chef adjoint, Division de l'économie publique, OCDE (Organisation de coopération et de développement économiques). Contact : boris.cournede@oecd.org.

Oliver DENK Économiste principal, Division de l'emploi et des revenus, OCDE. Contact : oliver.denk@oecd.org.Les opinions exprimées dans cet article sont celles des auteurs et ne sauraient être attribuées à l'OCDE ou à ses pays membres.

Financial sectors have massively expanded in advanced economies over the past fifty years, a period that has also been characterised by rising income inequality in most OECD countries. These two developments are not just simultaneous but linked. Econometric enquiries suggest that the overaccumulation of debt and the expansion of stock markets have contributed to increases in inequality. Analysis of micro-level pay data uncovers that this effect stems in part from the compensation premium that financial workers enjoy over their peers with similar profiles in other sectors. This analysis also shows that, in finance as elsewhere, men get higher pay than women with similar profiles. There are ways of economic reforms to tackle these challenges, so that the financial sector contributes to a more inclusive path for economic growth.