Culture and the Labour Market

Culture and the Labour Market

Siobhan Austen

Culture and the Labour Market attempts to define the meaning of culture and the nature of its possible consequences on economic processes and outcomes. In particular, the book examines alternative theoretical and empirical approaches to the economic analysis of cultural effects in the labour market. Using extensive new data from fourteen countries, the author finds tangible evidence of substantial cross-cultural differences in beliefs about wage inequality.

Chapter 7: Norms of Equality in a Changing World: Evidence from Six Countries

Siobhan Austen

Subjects: economics and finance, labour economics


7.1 INTRODUCTION This chapter extends the analysis of norms of equality that was presented in the previous chapter by examining evidence on changes in attitudes to inequality in Australia, West Germany, the United States, Great Britain, Poland and Hungary over the period 1987 to 1992. A number of specific questions about community attitudes to earnings inequality in these countries over this period are addressed. First, were there changes in the perceived fairness of high levels of earnings inequality and did these match the actual changes in wage dispersion that occurred over the 1987–1992 period? Second, did the six countries become more similar in terms of the level of tolerance of earnings inequality over this period of increased globalization? Third, did the attitudes of the citizens of Hungary and Poland to inequality become more ‘Western’ during this phase of their transition from planned to market economies? The answers to these questions can contribute further information on the relationship between norms of equality and the wage structure. For example, if community beliefs about the fairness of wage inequality were significantly influenced by the changes in the levels of inequality over the 1987–1992 period, the argument, advanced in Chapter Six, that social norms relating to wage inequality feature a degree of endogeneity, gains weight. Such endogeneity would strengthen the proposition that attempts to change wage structures are likely to meet with community or political resistance. Furthermore, as a result of this, national borders may continue to be the...

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