This paper studies determinants of income inequality using a newly assembled panel of 16 countries over the entire twentieth century. We focus on three groups of income earners: the rich (P99-100), the upper middle class (P90-99), and the rest of the population (P0-90). The results show that periods of high economic growth disproportionately increases the top percentile income share at the expense of the rest of the top decile. Financial development is also pro-rich and the outbreak of banking crises is associated with reduced income shares of the rich. Trade openness has no clear distributional impact (if anything openness reduces top shares). Government spending, however, is negative for the upper middle class and positive for the nine lowest deciles but does not seem to affect the rich. Finally, tax progressivity reduces top income shares and when accounting for real dynamic effects the impact can be important over time.

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in AbstractAnalyzing a large panel that matches public firms with worker-level data, we find that managerial entrenchment affects workers' pay. CEOs with more control pay their workers more, but financial incentives through ownership of more cash flow rights mitigate such behavior. These findings do not seem to be driven by productivity differences, and are unaffected by a series of robustness tests. Further evidence suggests that higher pay comes with non-pecuniary private benefits for a CEO, such as lower-effort wage bargaining with aggressive workers and their unions. Moreover, we find that entrenched CEOs pay more to employees who are closer to them in the firm's hierarchy, such as CFOs, vice-presidents and other executives, and whitecollar workers who work at or geographically close to the corporate headquarters. The evidence is consistent with an agency model in which managers have a taste for both profits and highly paid employees, and implies that corporate governance can be of importance for labor market outcomes such as workers' pay.

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If protectionist trade policies aim to insure domestic industries against swings in world market prices, the development of financial markets could lead to trade liberalization. Likewise, trade liberalization could lead to the development of financial markets that help agents diversify the added risks. In this paper, we empirically address the hypothesis that there is a positive interdependence between financial development and liberal trade policies. We find a positive and economically significant relationship between the two, with causation running in both directions. The results are, however, somewhat dependent on the measure of trade policy being used.

To reduce the transmission of severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2), most countries closed schools, despite uncertainty if school closures are an effective containment measure. At the onset of the pandemic, Swedish upper-secondary schools moved to online instruction, while lower-secondary schools remained open. This allows for a comparison of parents and teachers differently exposed to open and closed schools, but otherwise facing similar conditions. Leveraging rich Swedish register data, we connect all students and teachers in Sweden to their families and study the impact of moving to online instruction on the incidence of SARS-CoV-2 and COVID-19. We find that, among parents, exposure to open rather than closed schools resulted in a small increase in PCR-confirmed infections (odds ratio [OR] 1.17; 95% CI [CI95] 1.03 to 1.32). Among lower-secondary teachers, the infection rate doubled relative to upper-secondary teachers (OR 2.01; CI95 1.52 to 2.67). This spilled over to the partners of lower-secondary teachers, who had a higher infection rate than their upper-secondary counterparts (OR 1.29; CI95 1.00 to 1.67). When analyzing COVID-19 diagnoses from healthcare visits and the incidence of severe health outcomes, results are similar for teachers, but weaker for parents and teachers’ partners. The results for parents indicate that keeping lower-secondary schools open had minor consequences for the overall transmission of SARS-CoV-2 in society. The results for teachers suggest that measures to protect teachers could be considered.