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Economic development and wage inequality: A complex system analysis.

Angelica Sbardella^1,2, Emanuele Pugliese³, Luciano Pietronero^1,3

¹ISC-CNR - Institute of Complex Systems, Rome, Italy.

|September 20, 2017

Summary

This summary is machine-generated.

Global wage inequality follows a persistent pattern, with mid-development countries experiencing the highest levels. Within the US, industry structure drives wage inequality across counties.

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Area of Science:

Economics
Sociology
Complexity Science

Background:

Wage inequality is a significant global issue linked to economic development and industrialization.
The Kuznets curve hypothesis suggests an inverted U-shaped relationship between development and inequality.
Economic complexity, measured by Fitness, offers a new perspective on development.

Purpose of the Study:

To analyze the relationship between wage inequality and country development/industrialization using complex systems analysis.
To investigate global wage inequality patterns from 1990-2008.
To examine wage inequality within the United States across counties and industries from 1990-2014.

Main Methods:

Utilized complex system analysis methods.
Defined development as a combination of GDP per capita and the Fitness metric.
Applied the generalized Fitness-Complexity metric to geographic units and industrial sectors within the US.

Main Results:

Globally, wage inequality followed a pattern consistent with the Kuznets hypothesis, peaking at mid-development levels.
US wage inequality showed time and scale dependencies.
Institutional factors influence country-level inequality, while sectoral composition drives inequality within the US.

Conclusions:

The study confirms a persistent global pattern in wage inequality related to development.
Economic development and industrialization are key drivers of wage inequality.
Institutional factors and sectoral changes play crucial roles in shaping wage inequality at different scales.