TY  - BOOK
AU  - Barth,Erling
AU  - Moene,Karl O.
ED  - National Bureau of Economic Research.
TI  - The Equality Multiplier
T2  - NBER working paper series
PY  - 2009///
CY  - Cambridge, Mass.
PB  - National Bureau of Economic Research
N1  - June 2009; Hardcopy version available to institutional subscribers
N2  - Equality can multiply due to the complementarity between wage determination and welfare spending. A more equal wage distribution fuels welfare generosity via political competition. A more generous welfare state fuels wage equality further via its support to weak groups in the labor market. Together the two effects generate a cumulative process that adds up to an important social multiplier. We focus on a political economic equilibrium which incorporates this mutual dependence between wage setting and welfare spending. It explains how almost equally rich countries differ in economic and social equality among their citizens and why countries cluster around different worlds of welfare capitalism---the Scandinavian model, the Anglo-Saxon model and the Continental model. Using data on 18 OECD countries over the period 1976-2002 we test the main predictions of the model and identify a sizeable magnitude of the equality multiplier. We obtain additional support for the cumulative complementarity between social spending and wage equality by applying another data set for the US over the period 1945-2001
UR  - https://www.nber.org/papers/w15076
UR  - http://dx.doi.org/10.3386/w15076
ER  -