Working Paper: NBER ID: w28736
Authors: Dani Rodrik; Stefanie Stantcheva
Abstract: One of the biggest challenges that countries face today is the very unequal distributions of opportunities, resources, income and wealth across people. Inclusive prosperity – whereby many people from different backgrounds can benefit from economic growth, new technologies, and the fruits of globalization – remains elusive. To address these issues, societies face choices among many different policies and institutional arrangements to try to ensure a proper supply of productive jobs and activities, as well as access to education, financial means, and other endowments that prepare individuals for their participation in the economy. In this paper we offer a simple, organizing framework to think about policies for inclusive prosperity. We provide a comprehensive taxonomy of policies, distinguishing among the types of inequality they address and the stages of the economy where the intervention takes place. The taxonomy clarifies the differences among contending approaches to equity and inclusion and can help analysts assess the impacts and implications of different policies and identify potential gaps.
Keywords: inclusive prosperity; economic inequality; policy framework
JEL Codes: A1; E61; H2
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| pre-production policies (L23) | economic outcomes (F61) |
| early childhood education (A21) | economic security (F52) |
| minimum wage regulations (J38) | economic security (F52) |
| production-stage policies (L52) | income distribution (D31) |
| minimum wage laws (J38) | employment decisions (M51) |
| minimum wage laws (J38) | investment decisions (G11) |
| post-production policies (M38) | income distribution (D31) |
| progressive taxation (H29) | income redistribution (H23) |
| social transfers (H87) | income redistribution (H23) |