Equality and Efficiency: Policy for Globalisation

Publication date: 24 May 2006 | Publication type: NIESR Discussion Paper | NIESR Author(s): Weale, M | NIESR Discussion Paper Number: 273

Policy responses to increasing wage inequality in advanced countries are considered. Protection is argued to be a means of diverting resources to appease particular interest groups at net cost to society. A social security system is shown to damp the effects of increased inequality at the cost of aggravated unemployment. Reforms linking benefits more firmly to work are shown to reduce unemployment and, in the presence of learning from experience, to raise productivity and reduce overall inequality.

Keyword tags: 
social security reform, employment-linked benefits, wage inequality, globalisation