Concerns about the evolution of income inequality within countries have become an important element of public debate all over the world. While inequality reduction is a key global target reflected in the Sustainable Development Goals (SDGs), actual trends have been mixed at best. We know that over the past two decades, earnings inequality has increased, decreased, and remained roughly the same, depending on the country of study, but the reasons why are less clear. This project addresses this crucial knowledge gap by investigating the main drivers of observed trends in earnings inequalities within developing countries.

In many post-industrial economies, economists observe labour market polarization – when jobs and earnings decline in middle-income occupations but increase in low- and high-income occupations. This has been explained by globalization and the automation of traditionally middle-income occupations.

Recent advancements in the literature indicate that the evolution of the task structure within the labour market may play an important role in this regard. The “lost” jobs in the middle, which require performing high levels of routine tasks, have been mirrored by a relative growth of employment in highly personalized creative and service-oriented jobs for highly qualified professionals, at the top end, and in manual labor and low-skilled service jobs, at the bottom of the pay scale. This changing nature of work has been at the centre of recent analyses explaining the distribution of earnings in wealthy countries but remains understudied in the Global South.

This project fills this knowledge gap by examining how the changing nature of work affects earnings inequality in developing countries, relative other factors. Through in-depth examinations of 11 countries in Africa, Asia, and Latin America as well as a global investigation, it compares the impact that new production technologies and globalization have had on the distribution of workers’ earnings to other drivers.

Key questions

• How is the nature of work changing during the development path followed by different countries and regions of the world and how is this impacted by the globalization of trade and new technology?
• Do factors like a country’s position in the global value chain, access to technology, and labour market institutions matter?
• To what extent are changes in employment and earnings of more (and less) routine jobs affecting inequality in the Global South?
• How does the nature of earnings inequality in developing countries differ from the experience of developed countries?

Watch this space

All papers, data, opinion pieces and opportunities to engage relating to this project will be available on this web page.

UN’s 2030 Agenda for Sustainable Development

The project will identify the factors that contribute to earnings inequalities and point to policy measures which can help make labour markets more inclusive in the context of the changing nature of work. It specifically addresses SDG 10, reduced inequalities. https://unu.edu/explore/sustainable-development-goal-10