Financial Sector Transformation and Income Inequality-An Empirical Analysis

Szymborska, Hanna K.

doi:10.1515/fiqf-2016-0142

Abstract

This paper examines the relationship between financial sector transformation and income inequality. We construct an econometric model of income concentration for a panel of 16 OECD countries in the years 1995-2009. From our study, financial sector transformation, measured individually by three indicators (GDP share of stock market value traded, bank income and private credit), emerges as a nexus of complex and interconnected phenomena, which are strongly associated with the concentration of income at the top of the distribution.

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Financial Sector Transformation and Income Inequality-An Empirical Analysis

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