The Oxford Martin Programme on Inequality and Prosperity, established in 2016 as part of the Oxford Martin School’s research partnership with Citi, is currently at the core of the Employment, Equity and Growth research programme. The research team of Professor Brian Nolan, Dr. Tim Goedemé, Dr. Luis Valenzuela Rivera and Dr. David Weisstanner are investigating the drivers of economic inequality, the ways inequality impacts on growth, prosperity and opportunity, the relationship between increasing income inequality and the concentration of wealth, and policy responses including via the tax and transfer systems for working-age households and investment in human capital while supporting living standards.
A central challenge for 21st. century capitalism is to generate jobs that offer adequate rewards for ordinary workers and underpin a sustainable standard of living. The research is probing the complex relationship between productivity, inequality and living standards. It is seeking policy levers that can promote inclusive growth and solutions that can sustain high employment without having to accept that much of it will be at low wages.
Another stream of the research is focused on the relationship between increasing income inequality and the concentration of wealth at the top, and the growing importance of income from capital. Can wealth and the income arising from it be spread more widely, and what avenues are open to the state to achieve this?
The role of the state in redistribution via taxes and transfers is also critical to growth and prosperity. The research is assessing how best to strengthen the effectiveness of social transfers for working-age households, and align them with labour market institutions (such as minimum wages) to form a coherent strategy to encourage labour market participation and investment in human capital while supporting living standards. It is also focusing on those towards the bottom of the income distribution, and the role of rising inequality towards the bottom and the top in how their real living standards have been evolving.
Companies are affected by many of the potential policy responses to increasing inequality, as they are by the drivers of inequality themselves. The research is investigating what has been happening to the share of total output/income going to capital versus labour, and how this relates to trends in productivity and in the distribution of income among persons and households. It will consider what role companies could or should be expected to play in responding to rising inequality and promoting inclusive growth.
The programme is directly addressing current concerns about rising inequality and its impacts; it aims to yield important insights into the drivers of increasing inequality and its effects, and to identify a coherent set of responses aimed at promoting inclusive growth and prosperity.