The University of Edinburgh -

Working Papers on the Reconciliation of Work and Welfare in Europe

REC-WP 07 / 09

Earnings inequality and in-work-poverty

Rodolfo Gutiérrez Palacios, Ana Marta Guillén Rodríguez and Ramón Peña-Casas

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Earnings are one of the most relevant dimensions of job quality. They are the main reward within the employment relation, the one most valued by workers and the most multi-faceted instrument for achieving other goals. Very frequently, it is also closely associated with other objective and subjective dimensions of employment quality. Still, sociological and politics research only rarely consider the monetary components of employment quality.
In the last two decades, different factors stemming from the process of globalization, the evolution of the economy, changes in the labour market and social protection institutions and policies have led to changes in the level and patterns of earnings and income inequality. This contribution does not intend to draw a detailed picture of the state of that research; it rather aims to provide a quick glance into the situation and the most recent long or medium-term wage trends in a comparative international and European perspective. It is divided into 6 sections. The first deals with our level of knowledge about the impact of economic globalization on earnings inequalities. Sections 2 and 3 are devoted to the dynamics and present situation of the incidence of low paid work and in-work poverty respectively. Section 4 reflects on the different social, labour market and tax policies that may potentially rescue people from low pay and in-work poverty. Section 5 evaluates existing data and indicators. Finally, section 6 includes some tentative proposals for future research.


Earnings inequality in the European Union, in-work poverty, job quality labour market policies, social protection policies