Inequality in a Recessionary World: From global to local

In collaboration with:

Objectives

The last wave of globalization, and in particular in the recent economic crisis, has deeply reshaped the income distribution, both between and within countries in a very short period of time. The growing income inequality has been a cause of concern in many public debates and policy discussions, especially because today´s economic crisis is putting additional pressures on the distribution of incomes as well as many policy constraints to help people at the bottom of the income distribution.

This is true worldwide, but especially in Spain and some other European countries that have been heavily hit by the economic crisis. Most reports from international institutions, like the OECD or the IMF, have documented in the past recent years that the gap between rich and poor has widened over the past decades in most industrialized and emerging countries with very few exceptions. Spain was one of these exceptions. Overall, the growing income inequalities can be traced back to the increased dispersion in wage inequalities. Globalization puts a lot of pressure on wages in developed countries to gain competitiveness in global markets, whereas at the same time salaries of top executives are reluctant to decrease, instead they have experienced a steady rise in most countries.

In the vein, globalization has been much debated as the main cause of widening inequality. However, other factors play a role, such as increased financial flows, technological change and its impact on wages, employment trends and household demography. In fact, disentangling how all these factors affect the final distribution on disposable income is not an easy task, since the path from the initial market income to the final extended disposable income is a complex one. In addition, the public sector, through public transfers, taxes and in-kind services, such as health or education, has a great deal of influence on the distribution of resources.

Spain did not follow this general pattern, and the income distribution remained quite stable from the end of the eighties of the previous century until the recent economic crisis. It is true, however, that in a period of high growth, inequalities did not fall by a significant amount, but the increase in the level of income hide distributional problems that suddenly appeared when the income began to fall. In fact, Spain is one of the countries where inequality has risen more since the crisis began in 2007. The huge increase in inequality tells us that the cost of the recession has been shared very unevenly among the population, and that the efforts of the public sector to sustain the income of the poor have been unsuccessful.

This workshop will provide an excellent forum for discussing global and local inequalities in the actual recessionary world. Leading researchers in the field will contribute to our understanding of the different factors that shape the distribution of income, in the world, as well as in Spain, looking at the historical trends as well as the current situation.

Programme

Welcome and presentation: 9:00–9:30

Francisco Goerlich

First session: 9:30-11:30

Global Inequality
Chair: Matilde Mas (Universitat de València and Ivie)

“The Kuznets waves: Explaining the evolution of within-country inequality over the very long-term”
Branko Milanovic (Luxembourg Income Study Center)

“Towards a New Definition of Shared Prosperity: A Dynamic Perspective from Three Countries”
Peter Lanjouw (VU University of Amsterdam and The World Bank), joint work with Hai-Anh Dang

“Inequality Is Bad for Growth of the Poor (But Not for That of the Rich)”
Roy van der Weide (The World Bank)

Coffee break: 11:30-12:00

Second session: 12:00-14:00

Local Inequality
Chair: Francisco Goerlich (Universitat de València and Ivie)

"Income inequality in Spain: a very long run view"
Leandro Prados de la Escosura (Universidad Carlos III and CEPR)

"Distribution of wealth and the share of inheritance"
Facundo Alvaredo (Paris School of Economics)

"Income inequality and redistribution: What is the real role of taxation in Spain?”
Jorge Onrubia (Universidad Complutense de Madrid, FEDEA y GEN)

Coordinator

Francisco Goerlich (Universitat de València and Ivie)

Participants

Facundo Alvaredo (Paris School of Economics)
Francisco Goerlich (Universitat de València and Ivie)
Peter Lanjouw (VU University of Amsterdam and The World Bank), joint work with Hai-Anh Dang
Matilde Mas (Universitat de València and Ivie)
Branko Milanovic (Luxembourg Income Study Center)
Jorge Onrubia (Universidad Complutense de Madrid, FEDEA y GEN)
Leandro Prados de la Escosura (Universidad Carlos III and CEPR)
Roy van der Weide (The World Bank)

Venue

Universitat de València. Facultat d’Economia
Room Sánchez Ayuso (first floor)
Avenida de los Naranjos, s/n
46022 Valencia