Inequality: A hidden cost of market power


Some policies drive growth, others act to redistribute income or wealth.  While competition has long been known to drive economic growth, it can also make an important contribution to reducing income and wealth inequality.

This OECD paper develops a new model to illustrate how higher profits from market power, and associated higher prices, could influence the distribution of wealth and income through the analysis of data from eight OECD countries – Canada, France, Germany, Korea, Japan, Spain, the United Kingdom and the United States.

It suggests that market power and higher prices increase the wealth of the richest 10 per cent of the population in eight OECD countries by between 12% and 21%, while at the same time reducing the disposable income of the poorest 20 per cent by between 14% and 19%.

Download the paper: Inequality: a hidden cost of market power

See the article: The effects of market power on inequality, CPI Journal Fall 2017





The effects of market power on inequality, CPI journal, October 2017 Link to an external site icon

A Step Ahead: Competition Policy for Shared Prosperity and Inclusive Growth, 2017

Income inequality and poverty page

In It Together: Why Less Inequality Benefits All, 2015

Factsheet on how competition policy affects macro-economic outcomes, 2014

Competition and poverty reduction, 2013

Divided We Stand: Why Inequality Keeps Rising, 2011

Antitrust, Competition Policy, and Inequality  Link to an external site icon

Monopoly and the Distribution of Wealth  Link to an external site icon

The Distributional Effects of Monopoly Link to an external site icon

The Inequality Puzzle Link to an external site icon  

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» Link to the  OECD Competition Home Page 


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