To a host of observers, reducing economic inequality should not just be a goal but a top priority, because inequality has harmful consequences for a range of other things we care about, including living standards, democracy, equality of opportunity, health and happiness.
But is there a compelling case for significantly reducing economic inequality?
At this IPR event, Professor Lane Kenworthy, who has examined the experience of the rich democratic nations in the era of high and rising income inequality, from 1979 to 2019, shares his latest research.
He has found that the evidence that inequality has had damaging effects is underwhelming. Reducing income inequality, he says, isn't likely to significantly boost living standards for the poor or the middle class. It probably won't do much to equalise political influence. It's unlikely to help much with equalisation of economic opportunity and it probably won't make much difference for our health. And it's doubtful that it will facilitate a rise in happiness.
Instead, we're likely to make more progress in these areas by addressing them directly, rather than by pursuing them indirectly via a reduction in income inequality or wealth inequality. Reducing economic inequality should be a secondary goal, not a principal aim.
This IPR lecture took place on 16 May 2024.
