Archives - Vol. 12, No. 2all articles

Financial sector transformation and income inequality– an empirical analysis

Hanna K. Szymborska
pages: 36-48, JEL classification: E44, D63, C23, Key words: Financial Markets, Inequality, Fixed Eff ects Models, 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.