IDEAS home Printed from https://ideas.repec.org/p/lis/liswps/460.html
   My bibliography  Save this paper

Party to Inequality: Right Party Power and Income Inequality in Affluent Western Democracies

Author

Listed:
  • Kevin Leicht
  • David Brady

Abstract

Much social science suggests that income inequality is a product of economic and demographic factors and recent work highlights the influence of Leftist politics in affluent Western democracies. But, prior research has neglected rightist politics. We examine the impact of cumulative right party power on three measures of income inequality in an unbalanced panel of 16 affluent Western democracies from 1969 to 2000. We find that cumulative right party power significantly increases inequality with effects comparable to other established causes. Left party power has less influence than the right on the Gini coefficient and the 90/50 ratio but a larger influence on the 90/10 ratio. Union density is insignificant after controlling for right party power. Right party power partly channels through and partly combines with government expenditures to affect inequality. Temporal interactions show that right parties became more influential after 1989 while left parties became less effective. Supplementary analyses suggest that a component of right party power¿s effects occurs through labor market inequality prior to taxes and transfers. Sensitivity analyses reveal that the results are robust to a wide variety of alternative specifications and operationalizations and do not depend on the inclusion of the U.S. in the sample. Our results inform debates about the sources of inequality and related sociological theories regarding class, politics, the state and the economy.

Suggested Citation

  • Kevin Leicht & David Brady, 2007. "Party to Inequality: Right Party Power and Income Inequality in Affluent Western Democracies," LIS Working papers 460, LIS Cross-National Data Center in Luxembourg.
    • Handle: RePEc:lis:liswps:460
    as

    Download full text from publisher

    File URL: http://www.lisdatacenter.org/wps/liswps/460.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Alok Bhargava & J. D. Sargan, 2006. "Estimating Dynamic Random Effects Models From Panel Data Covering Short Time Periods," World Scientific Book Chapters, in: Econometrics, Statistics And Computational Approaches In Food And Health Sciences, chapter 1, pages 3-27, World Scientific Publishing Co. Pte. Ltd..
    2. Soskice, David, 1990. "Wage Determination: The Changing Role of Institutions in Advanced Industrialized Countries," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 6(4), pages 36-61, Winter.
    3. Fred Block & Jeff Manza, 1997. "Could we End Poverty in a Postindustrial Society? The Case for a Progressive Negative Income Tax," Politics & Society, , vol. 25(4), pages 473-511, December.
    4. Castles, Francis G., 2004. "The Future of the Welfare State: Crisis Myths and Crisis Realities," OUP Catalogue, Oxford University Press, number 9780199273928.
    5. Korpi, Walter & Palme, Joakim, 2003. "New Politics and Class Politics in the Context of Austerity and Globalization: Welfare State Regress in 18 Countries, 1975–95," American Political Science Review, Cambridge University Press, vol. 97(3), pages 425-446, August.
    6. Esping-Andersen, Gosta, 1999. "Social Foundations of Postindustrial Economies," OUP Catalogue, Oxford University Press, number 9780198742005.
    7. Navarro, Vicente & Shi, Leiyu, 2001. "The political context of social inequalities and health," Social Science & Medicine, Elsevier, vol. 52(3), pages 481-491, February.
    8. Korpi, Walter, 2003. "Welfare State Regress in Western Europe: Politics, Institutions, Globalization and Europeanization," Working Paper Series 5/2003, Stockholm University, Swedish Institute for Social Research.
    9. S Jay Levy, 1990. "The Politics of Rich and Poor: Wealth and the American Electorate in the Reagan Aftermath by Kevin Phillips by Kevin Phillips," Challenge, Taylor & Francis Journals, vol. 33(5), pages 60-63, September.
    10. Jay Teachman & Greg J. Duncan & W. Jean Yeung & Dan Levy, 2001. "Covariance Structure Models for Fixed and Random Effects," Sociological Methods & Research, , vol. 30(2), pages 271-288, November.
    11. Moene, K.O. & Wallerstein, M., 1995. "How Social Democracy Worked: Labour Market Institutions," Memorandum 1995_010, Oslo University, Department of Economics.
    12. David Brady, 2003. "The Politics of Poverty: Left Political Institutions, the Welfare State and Poverty," LIS Working papers 352, LIS Cross-National Data Center in Luxembourg.
    13. Albert Chevan & Randall Stokes, 2000. "Growth in family income inequality, 1970–1990: Industrial restructuring and demographic change," Demography, Springer;Population Association of America (PAA), vol. 37(3), pages 365-380, August.
    14. James P. Allan & Lyle Scruggs, 2004. "Political Partisanship and Welfare State Reform in Advanced Industrial Societies," American Journal of Political Science, John Wiley & Sons, vol. 48(3), pages 496-512, July.
    15. Chris Howell, 1995. "Trade Unions and the State: A Critique of British Industrial Relations," Politics & Society, , vol. 23(2), pages 149-183, June.
    16. Karl Ove Moene & Michael Wallerstein, 1995. "How Social Democracy Worked: Labor-Market Institutions," Politics & Society, , vol. 23(2), pages 185-211, June.
    17. Joakim Palme & Walter Korpi, 1998. "The Paradox of Redistribution and Strategies of Equality: Welfare State Institutions, Inequality and Poverty in the Western Countries," LIS Working papers 174, LIS Cross-National Data Center in Luxembourg.
    18. Nickell, Stephen J, 1981. "Biases in Dynamic Models with Fixed Effects," Econometrica, Econometric Society, vol. 49(6), pages 1417-1426, November.
    19. Andrea Brandolini & Anthony B. Atkinson, 2001. "Promise and Pitfalls in the Use of "Secondary" Data-Sets: Income Inequality in OECD Countries As a Case Study," Journal of Economic Literature, American Economic Association, vol. 39(3), pages 771-799, September.
    20. Henry S. Farber & Bruce Western, 2002. "Ronald Reagan and the Politics of Declining Union Organization," British Journal of Industrial Relations, London School of Economics, vol. 40(3), pages 385-401, September.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Denise Kall & David Brady, 2007. "Nearly Universal, but Somewhat Distinct: The Feminization of Poverty in Affluent Western Democracies, 1969-2000," LIS Working papers 462, LIS Cross-National Data Center in Luxembourg.
    2. David Brady, 2004. "The Welfare State and Relative Poverty in Rich Western Democracies, 1967-1997," LIS Working papers 390, LIS Cross-National Data Center in Luxembourg.
    3. Brady, David & Beckfield, Jason & Seeleib-Kaiser, Martin, 2004. "Economic Globalization and the Welfare State in Affluent Democracies, 1975-1998," Working papers of the ZeS 12/2004, University of Bremen, Centre for Social Policy Research (ZeS).
    4. David Brady, 2003. "The Politics of Poverty: Left Political Institutions, the Welfare State and Poverty," LIS Working papers 352, LIS Cross-National Data Center in Luxembourg.
    5. Kati Kuitto, 2018. "Measuring Welfare Entitlement Generosity in Transitional Welfare States: The Case of Post-communist Countries in Central and Eastern Europe," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 136(1), pages 203-224, February.
    6. Heise, Arne & Serfraz Khan, Ayesha, 2018. "The welfare state and liberal democracy: A political economy approach," ZÖSS-Discussion Papers 71, University of Hamburg, Centre for Economic and Sociological Studies (CESS/ZÖSS).
    7. Elsässer, Lea & Rademacher, Inga & Schäfer, Armin, 2015. "Cracks in the foundation: Retrenchment in advanced welfare states," economic sociology. perspectives and conversations, Max Planck Institute for the Study of Societies, vol. 16(3), pages 4-16.
    8. Manuela Arcanjo, 2009. "The Reform of Unemployment Protection Insurance, 1993-2007: the Erosion of Legislated Rights in France, Germany, Portugal and Spain," Working Papers Department of Economics 2009/01, ISEG - Lisbon School of Economics and Management, Department of Economics, Universidade de Lisboa.
    9. Brady, David & Lee, Hang Young, 2014. "The rise and fall of government spending in affluent democracies, 1971-2008," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 24(1), pages 56-79.
    10. Castater Eric Graig, 2015. "Unionization and the partisan effect on income inequality," Business and Politics, De Gruyter, vol. 17(1), pages 1-40, April.
    11. Thomas Volscho, Jr., 2004. "Income Distribution in 14 OECD Nations, 1967-2000: Evidence from the Luxembourg Income Study," LIS Working papers 386, LIS Cross-National Data Center in Luxembourg.
    12. Lyle Scruggs & James Allan, 2005. "The Material Consequences of Welfare States: Benefit Generosity and Absolute Poverty in 16 OECD Countries," LIS Working papers 409, LIS Cross-National Data Center in Luxembourg.
    13. Mathew Y. H. Wong, 2013. "Median Voter and Power Resources Revisited: A Composite Model of Inequality," LIS Working papers 584, LIS Cross-National Data Center in Luxembourg.
    14. David Brady, 2005. "Structural Theory and Relative Poverty in Rich Western Democracies, 1969-2000," LIS Working papers 407, LIS Cross-National Data Center in Luxembourg.
    15. Koen Caminada & Kees Goudswaard & Chen Wang & Jinxian Wang, 2019. "Income Inequality and Fiscal Redistribution in 31 Countries After the Crisis," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 61(1), pages 119-148, March.
    16. Bryant, Toba & Raphael, Dennis & Schrecker, Ted & Labonte, Ronald, 2011. "Canada: A land of missed opportunity for addressing the social determinants of health," Health Policy, Elsevier, vol. 101(1), pages 44-58, June.
    17. Paetzold, Jörg, 2012. "The Convergence of Welfare State Indicators in Europe: Evidence from Panel Data," Working Papers in Economics 2012-4, University of Salzburg.
    18. Jon Olaskoaga-Larrauri & Ricardo Aláez-Aller & Pablo Díaz-de-Basurto, 2010. "Retrenchment or Resilience? New Evidence on Relative Social Expenditure Trends," Environment and Planning C, , vol. 28(5), pages 923-942, October.
    19. Chung, Haejoo & Muntaner, Carles, 2007. "Welfare state matters: A typological multilevel analysis of wealthy countries," Health Policy, Elsevier, vol. 80(2), pages 328-339, February.
    20. Mehmet F. Aysan & Roderic Beaujot, 2009. "Welfare Regimes for Aging Populations: No Single Path for Reform," Population and Development Review, The Population Council, Inc., vol. 35(4), pages 701-720, December.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:lis:liswps:460. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Piotr Paradowski (email available below). General contact details of provider: https://edirc.repec.org/data/lisprlu.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.