REDUCING INCOME INEQUALITY WHILE BOOSTING ECONOMIC GROWTH: CAN IT BE DONE? EVIDENCE FROM OECD COUNTRIES

This paper identifies inequality patterns across Organisation for Economic Co-operation and Development (OECD) countries and provides new analysis of their policy and non-policy drivers. One key finding is that education and anti-discrimination policies, well-designed labor market institutions and large and/or progressive tax and transfer systems can all reduce income inequality. On this basis, the paper identifies several policy reforms that could yield a double dividend in terms of boosting GDP per capita and reducing income inequality, and also flags other policy areas where reforms would entail a trade-off between both objectives.