3
show that there is a great deal of variation among countries and through time. It will also
show that the ratio of wages earned by a worker at the 90
th
percentile to those earned by a
worker at the 10
th
percentile (90-10 ratio) shares important similarities with the 50-10 ratio
(the ratio of wages earned by a worker at the 50
th
percentile to those earned by a worker at
the 10
th
percentile). I then will introduce the main focus of this paper: the relationship
between government partisanship and wage inequality at the bottom half of the wage
distribution. I will dedicate the rest of this paper to exploring the role of different policies
and government partisanship (as well as the relationship between the two) in the
determination of wage inequality. I argue that to understand the relationship between
partisan government and inequality two fundamental things need to be done: to separate the
effects of partisanship on policy and of policy on inequality; and to assess the influence of
political agency once the mediating role of institutions is accounted for. I explain why some
institutions mitigate the influence of government partisanship while others magnify it. By
explicitly exploring the determinants of policy and inequality, my paper presents a more
accurate analysis of how governments promote redistribution. I test my claims with data
from 16 OECD countries from 1973 to 1995.
Patterns of Wage Inequality
Table 1 summarizes the wage inequality observations which serve as the dependent
variable for my analysis. For each country, the table provides the mean value for wage
inequality at the lower half of the wage distribution (the 50-10 ratio) for the entire period
1973-95 and also the percentage change from the earliest to the most recent observation. For
the purpose of comparison, I have also included means and percentage changes for wage
inequality in the entire wage distribution (the 90-10 ratio). It should be noted at the outset
that these inequality measures refer to gross income from employment for individuals: they
ignore other sources of income (government transfers, self-employment, income from
capital, etc.) and also exclude the distributive effects of taxation and income pooling within
Convention