Financialization raises earnings inequality across most US industries

Evidence

The jackknife analysis shows that the estimates range from 0.575 ð0.084Þ, when excluding the motion picture and sound recording industry, to 21.202 ð0.202Þ, when excluding the electrical equipment, appliance, and component manufacturing industry ðagain, both are outliers with regard to the level of financializationÞ. When excluding these two industries simultaneously, the average effect is 1.7 with a standard error of 0.294. Thus, for most industries even in the later period, financialization remains associated with increased earnings inequality. — Ken-Hou Lin & Donald Tomaskovic-Devey, Financialization and U.S. Income…, 152

Categorization

• XREF: connects to: US income inequality roughly doubled between 1980 and 2007. — Mark Blyth, Austerity: The History of a Dangerous…, 59; Most earnings inequality growth occurred within industries, not between them. — Ken-Hou Lin & Donald Tomaskovic-Devey, Financialization and U.S. Income…, 81; Financialization drives earnings inequality nearly as much as declining unionization — Ken-Hou Lin & Donald Tomaskovic-Devey, Financialization and U.S. Income…, 164 (+6 more)

Related

• Financialization drives earnings inequality nearly as much as declining unionization (similarity 0.92)
• Most earnings inequality growth occurred within industries, not between them. (similarity 0.88)
• Declining industries show rising earnings inequality (similarity 0.87)
• Financialization trajectories diverged across industries after 1997 (similarity 0.87)
• Financial-sector workers’ pay since the 1980s far outstripped national averages, driving inequality. (similarity 0.87)
• Deunionization still leaves much wage inequality unexplained, pointing to financialization (similarity 0.86)
• Financialization independently explains over half of labor’s falling income share since 1970. (similarity 0.86)
• Financialization caused most of the decline in labor’s income share since 1970 (similarity 0.86)
• Inequality dimensions reflect one institutional shift toward financialization (similarity 0.85)
• Financialization channels income toward the wealthy and depresses productive investment and wages. (similarity 0.84)
• Prior research linked financialization to inequality mostly indirectly, not causally. (similarity 0.84)
• US inequality since 1970 grew mostly within rather than between industries (similarity 0.84)
• US income inequality roughly doubled between 1980 and 2007. (similarity 0.84)
• Counterfactual independence assumptions likely understate financialization’s true inequality impact (similarity 0.82)
• Structural inequality has redistributed trillions from American workers to the richest (similarity 0.82)

Broader Connections

• Financialization drives earnings inequality nearly as much as declining unionization #corroborates (0.93) — Ken-Hou Lin & Donald Tomaskovic-Devey, Financialization and U.S. Income…, 164
• Financialization theory links wage-compromise collapse and shareholder value to inequality #expands (0.85) — Natascha van der Zwan, Making Sense of Financialization, 109