Pathways toward Inclusive Income Growth: A Comparative Decomposition of National Growth Profiles

Despite rising interest in income inequality, scholars remain divided over the mechanisms underlying inclusive growth and how these vary across countries. This study introduces concept of national profiles, that is, additive contribution changes taxes, transfers, composition, other factors including market institutions to a country’s distribution. We present decomposition framework measure profiles for eight high-income countries from 1980s 2010s. Our findings adjudicate competing sociological economic perspectives on inequality. First, we find policy-driven taxes transfers are dominant drivers at tails distributions. Second, educational attainment contributes most distribution, but consistently less-inclusive growth. When education considered, assortative mating single parenthood have little consequence Third, increased inequality such as United States, less so France Germany. Had States matched Dutch tax policy, Danish transfer or countries, it could achieved more than observed.