The following thesis aims to provide a general picture of to what extent different important sources – at the macro and the micro level – affect income inequality over time.
Indeed, given the natural interdependence between society (macro) and individuals (micro), a comprehensive perspective is required for studying the dynamics of outcomes. For example, the structural characteristics of the welfare system of a given country directly affects individual labour supply choices, but also the labour market institutional structure. Furthermore, there are also micro dynamics at play, mostly regarding individual choices – such as education – as well as social class dynamics, i.e., actions to preserve/improve one’s socio-economic status. These family and class actions may directly facilitate or limit the transmission of income inequalities, but may also indirectly affect the types of workers available on the labour market.
In this sense, these different dynamics must be analysed in order to identify the key mechanisms through which inequality could develop, and this analysis could also be useful in better guiding policy actions.
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