Ups and Downs in Finance, Ups without Downs in Inequality

The upswing in finance over the past several decades has led to rising inequality, but do downswings in finance lead to a symmetric decline in inequality? In this paper, we analyze the asymmetry of the effect of ups and downs in financial markets, as well as the effect of increased capital requirements and the bonus cap on national earnings in- equality. We use administrative employer–employee linked data on earnings from 1990 to 2017 for twelve countries. Additionally, we use data on earnings from bank reports, from 2009 to 2017 in thirteen European countries. We find a strong asymmetry in the effects of financial ups and downs on earnings inequality, a mitigating effect of rising capital requirements on the contribution of finance to inequality, and a restructuring ef- fect of the bonus cap for the earnings of financiers, while neither policy affects absolute levels of earnings inequality.La hausse de la finance au cours des dernières décennies a entraîné une hausse des inégalités, mais les ralentissements de la finance entraînent-ils une baisse symétrique des inégalités? Dans cet article, nous examinons l'asymétrie de l'effet des hausses et des ralentissements des marchés financiers, ainsi que l'effet de l'augmentation des exi- gences en matière de capital et du plafonnement des primes sur l'inégalité des salaires nationaux. Nous utilisons des données administratives couplées employeur-employé sur les salaires de 1990 à 2017 pour douze pays. De plus, nous employons des données sur les salaires provenant des rapports bancaires, de 2009 à 2017, dans 13 pays euro- péens. Nous constatons une forte asymétrie dans les effets des hausses et des ralentis- sements financières sur l'inégalité des salaires, un effet de mitigation de l'augmentation des exigences de capitalisation sur la contribution de la finance à l'inégalité, et un effet de restructuration du plafonnement des primes pour les salaires des financiers, alors qu'aucune des deux mesures n'affecte les niveaux absolus d'inégalité des salaires.iv MaxPo Discussion Paper 21/2 1 Introduction 2 Data Administrative employer–employee linked data World Bank GFDD database European bank reports 3 The contribution of financiers’ earnings to inequality and its asymmetry in upswings and downswings Less finance, less inequality? The asymmetry of the redistribution of earnings through financialization 4 Finance, regulation, and inequality Capital requirements and inequality The bonus cap 5 Conclusion Appendices A1 Data description A2 Supplementary tables and figures Reference

The Great Separation: Top Earner Segregation at Work in High-Income Countries

Analyzing linked employer-employee panel administrative databases, we study the evolving isolation of higher earners from other employees in eleven countries: Canada, Czechia, Denmark, France, Germany, Hungary, Japan, Norway, Spain, South Korea, and Sweden. We find in almost all countries a growing workplace isolation of top earners and dramatically declining exposure of top earners to bottom earners. We compare these trends to segregation based on occupational class, education, age, gender, and nativity, finding that the rise in top earner isolation is much more dramatic and general across countries. We find that residential segregation is also growing, although more slowly than segregation at work, with top earners and bottom earners increasingly living in different distinct municipalities. While work and residential segregation are correlated, statistical modeling suggests that the primary causal effect is from work to residential segregation. These findings open up a future research program on the causes and consequences of top earner segregation.En nous appuyant sur des données administratives longitudinales employeur–employés, nous analysons l’évolution de la ségrégation sociale des salariés à hauts salaires dans onze pays: Allemagne, Canada, Corée du Sud, Danemark, Espagne, France, Hongrie, Japon, Norvège, République tchèque et Suède. Nous constatons dans presque tous les pays une forte augmentation de l’entre soi des salariés bien payés sur le lieu de travail et une diminution spectaculaire de leur exposition aux bas salaires. Nous comparons ces tendances à l’évolution de la ségrégation fondée sur la catégorie sociale, l’éducation, l’âge, le sexe et le statut migratoire, et nous constatons que l’augmentation de l’entre soi des hauts salaires est celle qui est la plus prononcée et la plus générale. Nous montrons que la ségrégation résidentielle se développe aussi, bien que plus lentement que la ségrégation au travail, avec les hauts et les bas salaires vivant de plus en plus dans des municipalités distinctes. Ségrégation au travail et ségrégation résidentielle sont corrélées. Mais nos modèles statistiques suggèrent aussi que la principale relation de causalité va de la ségrégation au travail vers la ségrégation résidentielle. Ces résultats ouvrent la voie à un futur programme de recherche sur les causes et les conséquences de la ségrégation des hauts salaires.1 Introduction 2 From ethnic residential segregation to earnings segregation at work 3 Administrative data for estimating exposure measures 4 A strong increase in earnings segregation at work 5 A robust trend 17 French robustness tests 6 A specific trend 7 The link between work and residential segregation 8 Elements for a research program on the causes and consequences of increasing segregation at work The roots of growing earnings segregation at work The consequences of growing earnings segregation at work Appendices A1 Data sources and sample definition A2 Demonstration of the symmetry of relative exposure gRh = hRg A3 Figure construction A4 French robustness checks Supplementary figures and tables Reference

The development of the Ottoman military industry: response to innovations in small arms technology (conversion and interchangeability)

This study aims to analyze the munition making process of the Ottoman defense industry in the second half of the 19th century in parallel with the modern style of warfare, namely interchangeability (intersanjabil). The Ottomans, mostly a purchaser of war materials, pursued a state-sponsored policy to design their state-arsenals which remained modest and diminutive, but still active and productive till the end of the Great War. The attainment of interchangeability in the Ottoman defense industry was a conscious policy to reduce the costs of production and minimize the dependence upon Western technology

Ups and downs in finance, ups without downs in inequality

The upswing in finance in recent decades has led to rising inequality, but do downswings in finance lead to a symmetric decline in inequality? We analyze the asymmetry of the effect of ups and downs in finance, and the effect of increased capital requirements and the bonus cap on national earnings inequality. We use administrative employer–employee-linked data from 1990 to 2019 for 12 countries and data from bank reports, from 2009 to 2017 in 13 European countries. We find a strong asymmetry in the effect of upswings and downswings in finance on earnings inequality, a weak, if any, mitigating effect of capital requirements on finance’s contribution to inequality, and a restructuring but no absolute effect of the bonus cap on financiers’ earnings. We suggest that while rising financiers’ wages increase inequality in upswings, they are resilient in downswings and thus downswings do not contribute to a symmetric decline in inequality