a1 Keystone Research Center
a2 University of North Carolina at Chapel Hill
This article analyzes the processes of distribution and redistribution in postindustrial democracies. The authors combine a pooled time-series data base on welfare state effort and its determinants assembled by Huber, Ragin, and Stephens (1997) with data on income distribution assembled in the Luxembourg Income Survey (IJS) archive. In the case of the LIS data, the authors recalculate the microdata in order to remove the distorting influence of pensioners on pretax, pretransfer income distribution. They examine the determinants of two dependent variables: pretax, pretransfer income inequality and the proportional reduction in inequality from pre- to post—tax and transfer inequality. They test hypotheses derived from power resources theory against alternatives derived from the literature on the development of the welfare state and the determinants of income inequality, The results offer strong support for power resources theory, particularly in the case of reduction in inequality. Union density, unemployment, and percentage of female-headed households were the main determinants of pre—tax and transfer inequality (R2 = .64), while leftist government, directly and indirectly through its influence on the size of the welfare state, was found to be by far the strongest determinant of distribution (R2 = .81).
David Bradley is a policy analyst for the Keystone Research Center, the Pennsylvania affiliate of the Washington, D.C.—based Economic Policy Institute. He received his Ph.D. in political science from the University of North Carolina at Chapel Hill in 2001.
Evelyne Huber (formerly Evelyne Huber Stephens) is a professor of political science and director of the Institute of Latin American Studies at the University of North Carolina at Chapel Hill. She has written on the politics of reform, ranging from installation of formal political democracy and widening of political inclusion to establishment and adaptation of different social policy regimes, comparing cases within and across Latin America and Western Europe. She is the editor of Models of Capitalism: Lessons for Latin America (2002) and coauthor (with John D. Stephens) of Development and Crisis ofthe Welfare State: Parties and Policies in Global Markets (2001).
Stephanie Moller is a Ph.D. candidate in the Department of Sociology at the University of North Carolina at Chapel Hill. Her dissertation examines the impact of state and economic structures on household income in the United States.
François Nielsen is a professor of sociology at the University of North Carolina at Chapel Hill. He has published articles on historical trends and international comparisons of inequality in the distribution of income that have appeared in various journals. He is currently doing research on inequality in collaboration with Art Alderson and with the coauthors of this article.
John D. Stephens is a professor of political science and sociology at the University of North Carolina at Chapel Hill. He is coauthor (with Evelyne Huber) of Development and Crisis ofthe Welfare State: Parties and Policies in Global Markets (2001) and (with Dietrich Rueschemeyer and Evelyne Huber Stephens) of Capitalist Development and Democracy (1992). His current research is on the impact of marketizing reform on social policy in Latin America, Iberia, and the Antipodes.
* The authors would like to thank Ben Page and Michael Wallerstein, as well as participants in workshops on the welfare state and on inequality at Northwestern and Cornell Universities, for helpful comments on earlier drafts.