Research on inequality, instability and employment

The current economic crisis has renewed interest in the importance of equitable income distribution for development, employment and social cohesion. But there is no consensus on how best to achieve equity. Many academics and policy-makers have argued that increased education and training opportunities will improve income distribution, but little attention has been paid to the role that labour market institutions could play.

This research programme seeks to better understand how wage and income inequality are affected by labour market institutions – including minimum wages, collective bargaining, type of employment contract, social security, social assistance and the provision of public goods.

Recognizing that the structure of an economy, market forces and labour institutions all shape wages and incomes in a country, the research will analyse different levels of distribution, including between wages and profits (functional distribution), amongst workers (primary distribution) and within and amongst households (secondary distribution). The research programme will also analyse how wage and income inequality affect job creation and social and economic development, paying attention to the link between equity and macroeconomic performance.

The overall objective of the research programme is to inform the policy advice given to ILO constituents on the scope and limitations of labour market institutions for altering the distribution of income.