Ups and downs in finance, ups without downs in inequality-Reference-Cited by-同舟云学术

Ups and downs in finance, ups without downs in inequality

Published:2022-07-15 Issue: Volume: Page:
ISSN:1475-1461
Container-title:Socio-Economic Review
language:en
Short-container-title:

Author:

Godechot Olivier¹^ORCID,Neumann Nils¹^ORCID,Apascaritei Paula²,Boza István³^ORCID,Hallsten Martin⁴,Henriksen Lasse⁵,Hermansen Are⁶⁷,Hou Feng⁸,Jung Jiwook⁹^ORCID,Kodama Naomi¹⁰,Křížková Alena¹¹^ORCID,Lippényi Zoltán¹²,Elvira Marta M¹³,Melzer Silvia Maja¹⁴,Mun Eunmi⁹^ORCID,Sabanci Halil¹⁵,Soener Matthew¹⁶,Thaning Max⁴^ORCID

Affiliation:

1. MaxPo and OSC-CNRS, Axa Chair Holder, Sciences Po , Paris, France

2. Independent researcher

3. Centre for Economic and Regional Studies , Budapest, Hungary

4. Department of Sociology, Stockholm University , Stockholm, Sweden

5. Department of Organization, Copenhagen Business School , Copenhagen, Denmark

6. Department of Sociology and Human Geography, University of Oslo , Oslo, Norway

7. Swedish Institute for Social Research, Stockholm University , Stockholm, Sweden

8. Statistics Canada , Ottawa, Canada

9. School of Labor and Employment Relations, University of Illinois , Urbana-Champaign, USA

10. Faculty of Economics, Meijigakuin University , Tokyo, Japan

11. Institute of Sociology, Czech Academy of Sciences , Prague, Czech Republic

12. Department of Sociology, University of Groningen , Groningen, The Netherlands

13. Departments of Strategic Management and Managing People in Organizations, IESE Business School, University of Navarra , Pamplona, Spain

14. Department of Political & Social Sciences, University Pompeu Fabra , Barcelona, Spain

15. Management Department, Frankfurt School of Finance and Management , Frankfurt, Germany

16. Department of Sociology, University of Illinois , Urbana-Champaign, USA

Abstract

Abstract The upswing in finance in recent decades has led to rising inequality, but do downswings in finance lead to a symmetric decline in inequality? We analyze the asymmetry of the effect of ups and downs in finance, and the effect of increased capital requirements and the bonus cap on national earnings inequality. We use administrative employer–employee-linked data from 1990 to 2019 for 12 countries and data from bank reports, from 2009 to 2017 in 13 European countries. We find a strong asymmetry in the effect of upswings and downswings in finance on earnings inequality, a weak, if any, mitigating effect of capital requirements on finance’s contribution to inequality, and a restructuring but no absolute effect of the bonus cap on financiers’ earnings. We suggest that while rising financiers’ wages increase inequality in upswings, they are resilient in downswings and thus downswings do not contribute to a symmetric decline in inequality.

Funder

National Agency for Research

Independent Research Fund

Publisher

Oxford University Press (OUP)

Subject

General Economics, Econometrics and Finance,Sociology and Political Science

Link

https://academic.oup.com/ser/advance-article-pdf/doi/10.1093/ser/mwac036/48180907/mwac036.pdf

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