Inequality & Prosperity

Income inequality has increased substantially in many OECD countries in recent decades. As well as concerns about equity and fairness, inequality presents a major threat to long-term growth and prosperity.

Technological change, globalization, changes in labour market institutions, the role of finance and ‘top pay’, weakening redistribution of income, greater concentration of wealth and the income arising from it, are all factors that contribute to rising inequality.

While researchers disagree on the relative contribution of these elements – not least because they are all inter-related - the search for effective responses is still at an early stage, and even international organisations like the OECD and IMF are advancing very broad recommendations, such as the prioritization of education and training. There is, therefore, an urgent need to understand these issues better and identify a coherent set of responses that would address rising inequality in a way that promotes inclusive growth.

A team led by Professor Brian Nolan is investigating the various drivers of economic inequality, the ways inequality impacts on growth and prosperity, and what can be done about. Core members of the research team are Tim Goedeme, Helen Kowalewska, Marii Paskov, Luis Valenzuela and David Weisstanner.

The programme directly addresses current concerns about rising inequality and its impacts; yields important insights into the drivers of increasing inequality and its effects; and aims to identify a coherent set of responses aimed at promoting inclusive growth and prosperity. While primarily focused on the currently rich countries, it seeks to incorporate key trends in, and implications for, those seeking to join them.

This programme was established in 2016 as part of the Oxford Martin School’s research partnership with Citi, to look at promoting inclusive growth. It forms a core element of research in the Institute for New Economic Thinking at the Oxford Martin School on employment, equity and growth.