The Oxford Martin Programme on

Inequality & Prosperity

This programme on promoting inclusive growth was established in 2016 as part of the Oxford Martin School’s research partnership with Citi, supported by Citi up to 2021 as a core element of the on-going collaboration between the Institute for New Economic Thinking at the Oxford Martin School and the University’s Department of Social Policy and Intervention. The following page is an archived resource.

The Challenge

When the benefits of economic growth are increasingly concentrated at the top of the distribution, as has been the case in many rich countries over recent decades, this poses a major threat to long-term growth and prosperity. There is an urgent need to understand what has been driving this concentration and identify a coherent set of responses to address it in a way that promotes inclusive growth.

The programme’s research team led by Professor Brian Nolan and including Tim Goedemé, Helen Kowalewska, Matteo Richiardi, Luis Valenzuela Rivera and David Weisstanner investigated a set of inter-related questions about the drivers of economic inequality, how inequality affects economic growth and living standards as well as intergenerational mobility and opportunity, the relationship between inequality in income and in wealth, how inequality affects individuals’ social status and political preferences and behaviour, and how best to frame policy responses including via the tax and transfer systems, family policy, and wealth endowments.

The programme of research on inequality-related topics in INET and the Department of Social Policy and Intervention is continuing supported from 2021 onwards by a 6-year grant from the European Research Council to Professor Nolan in collaboration with Thomas Piketty (Paris School of Economics) and Emmanuel Saez (University of California-Berkeley) for Towards a System of Distributional National Accounts.

research themes

Rewarding Work

This research stream focused on the complex relationships between the division of national income between labour and capital, personal income inequality, and living standards. It highlighted the role of labour market and product market power, having exploiting the potential of firm-level data and new analytical approaches to probe these topics. It assessed the contribution of the various factors driving increasing inequality, bringing out the importance of institutions and policies going beyond forces such as technological change to include regulation, collective bargaining, minimum wages and tax/benefit systems.

Inequality, Wealth and Opportunity

This stream of research probed the relationship between increasing income inequality, the concentration of wealth towards the top, and opportunity. It assessed ways in which wealth and the income arising from it can be spread more widely and what avenues are open to the state to achieve this, including via potential universal wealth endowment schemes. It investigated core channels in the transmission of economic advantage and disadvantage across generations, in particular the direct and indirect benefits of coming from a wealthy family and how this affects wealth inequality and inequality of opportunity.

Inequality, Taxation and Social Transfers

The role of the state in redistribution via taxes and transfers is critical to growth and prosperity. The research has unpacked how market income inequality relates to inequality in incomes after taxes and transfers, and how rising inequality has affected those in the middle and lower parts of the distribution in particular. This underpinned conclusions on strengthening the effectiveness of social transfers for working-age households and align them with labour market institutions (such as minimum wages) to form a coherent strategy to encourage labour market participation and investment in human capital while supporting living standards. The role of family policies in supporting female labour force participation was also a key focus.

Inequality and Societal Wellbeing

Income inequality is widely seen as having important consequences for societal wellbeing and the democratic political process, which in turn condition the responses available to promote policies for inclusive growth.

This research stream studies how income inequality affects individuals’ social trust, their political preferences (such as attitudes towards redistribution) and their political behaviour. The much-debated role of declining or threatened social status was a specific focus in considering how democracies are being challenged by various deepening socio-economic cleavages.

Featured publications

Inequality and Prosperity in the Industrialized World: Addressing a Growing Challenge

This Citi GPS report sets out how income inequality has risen in most OECD countries in recent decades. The recession following the global financial crisis has exacerbated this trend in some of the worst-hit countries, while sometimes interrupting it elsewhere.

This report investigates the forces driving inequality upwards, highlighting the role of technological change, globalisation, deregulation, declining union power, demographic change and weakening redistribution by taxes and transfers.

Download the CIti GPS report
Generating Prosperity for Working Families in Affluent Countries

Rising inequality has become such a widespread concern in rich countries primarily because it is seen to be associated with long-term stagnation in living standards for ordinary working households, compounded by the Great Recession.

This book presents the findings of a comprehensive analysis of performance in improving ordinary living standards over recent decades across the wealthy nations of the OECD. By looking across a broad canvas, the book draws important lessons for how best to pursue the quest for inclusive growth and prosperity.

Buy the book at Oxford University Press


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