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Policy approaches to reduce inequalities while boosting productivity growth
Over the past decades, productivity growth and technology diffusion have slowed down, and business dynamism has declined in many advanced and emerging economies. Meanwhile, inequalities in economic outcomes, such as in income and wealth, and in opportunities, such as access to quality education and training, are pervasive. By hampering social mobility and the efficient allocation of talents, inequality of opportunities may trigger slower growth and even higher inequalities in outcomes. Policies to boost growth and make it more inclusive should focus on (i) ensuring broad access to quality education, from childhood onwards, and upskilling throughout working lives; (ii) addressing labour market insecurity and informality and improving job quality; (iii) curbing market power in products and labour markets to boost business dynamism; (iv) enhancing the efficiency and progressivity of taxes and transfer systems; and (v) fostering international cooperation, for instance in trade and taxation.
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