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This study investigated the inequitable distribution of income and visualized its association with human capital ratio in inclusive wealth by combining global corporate data with inclusive wealth data. The main findings show that employees tend to be better off in countries with a more human-capital-centered productive base, indicating that human capital development plays a vital role in promoting equitable distribution of income. In the pursuit of sustainable development goals, human capital investment could be an effective solution to reduce inequalities. [ABSTRACT FROM AUTHOR]

• There is evidence on the endogeneity of labor productivity to the wage and the persistence of wage inequality across similar workers and firms. • We build an evolutionary micro-dynamic model having these two features of the labor market as interconnected. • We explore the implications of such micro-dynamics for the macro-dynamics of the distribution of income, capacity utilization and output growth. • Firms periodically revise (and possibly switch) their choice of remuneration with a higher or lower wage. • The productivity differential across workers is endogenous to the distribution of wage strategies across firms. • The long run features wage inequality as a persistent outcome. • Plausibly low levels of wage inequality cause the micro- and macro-dynamic variables to experience self-sustaining cyclical fluctuations. There is extensive evidence on both the endogeneity of labor productivity to the wage remuneration and the persistence of wage inequality across observationally similar workers and firms. The paper builds an evolutionary micro-dynamic model having these two features of the labor market as interconnected, and explores the ensuing implications for the macro-dynamics of the distribution of income, capacity utilization and output growth. Firms periodically revise (and possibly switch) their choice of remunerating workers with a higher or lower wage, and the resulting labor productivity differential across workers is endogenous to the distribution of wage remuneration strategies across firms. The long run features wage inequality as a persistent outcome. Plausibly low levels of wage inequality cause the distribution of wage remuneration strategies across firms, and therefore the functional distribution of income, capacity utilization and output growth, all to experience self-sustaining cyclical fluctuations. Interestingly, the level of wage inequality is a bifurcation dimension. [ABSTRACT FROM AUTHOR]

Abstract: We examine the empirical relationship between the institutions of economic freedom and labor shares in a panel of up to 93 countries covering 1970 through 2009. We find that a standard deviation increase in the Fraser Institute's Economic Freedom of the World (EFW) score is associated with about a 1/3 standard deviation increase in a country's labor share. Starting from the sample mean labor share in our panel, this amounts to about 4.26percentage points. This relationship is robust to considering OECD and non-OECD samples separately. It is also (both qualitatively and quantitatively) robust to controlling for differences in human capital levels, labor productivity, trade union density, and international economic flows. Breaking the EFW into its individual component areas, the regulation of credit, business and labor appears to be the most important source of the positive EFW–labor share relationship. [Copyright &y& Elsevier]

The median voter theorem suggests that a majority vote over a linear tax-cum-transfer scheme results in egalitarianism if the median of the income distribution is poorer than the average. However, although most real-world income distributions are markedly skewed to the right, radical redistribution is rather an exception than the norm. In this paper we review the theoretical arguments that explain limited redistribution as an outcome of the political process. The contributions are classified into two categories, according to whether it is the properties of the political process that prevent the poor from politically implementing their will, or whether it is in the self-interest of the poor to refrain from radical redistribution. [Copyright &y& Elsevier]

• Economic sophistication shows the productive knowledge of a country. • Productive knowledge is embedded in labor, which increases workers' bargaining power. • Cross-country evidence shows that economic sophistication increases labor share. • This phenomenon applies equally to both OECD and non-OECD countries. • The positive relationship between economic sophistication and labor share is conditional upon the level of human capital. We present economic sophistication, the ability to produce complex products, as a potential determinant of labor share. Economic sophistication requires specific skills and tacit knowledge embedded in labor. It increases the bargaining power of workers, resulting in a higher labor share. We are the first to present economic sophistication as a potential determinant of labor share. We employ a fixed-effect model using panel data from 98 countries observed from 1970–2015 to find that economic sophistication has a positive and statistically significant effect on labor share. This positive effect applies to both OECD and non-OECD countries. A one standard deviation increase in economic sophistication increases labor share by about 3 percent, which corresponds to about 1.6 percentage points increase relative to the mean. Further, we show that economic sophistication and human capital have a substantial interaction effect that varies across OECD and non-OECD countries. [ABSTRACT FROM AUTHOR]