Competition Law and Income Inequality : A Panel Data Econometric Approach

This paper investigates the relationship between competition law and income inequality using ‎panel data techniques for a large sample of countries over the period 1960–2010. Applying ‎our analysis to a World sample and OECD countries, we find consistent evidence of a ‎negative, and in some specifications significant, relationship between competition law and ‎levels of income and wage inequality. A country's level of development, its membership of ‎geographic competition law network and the metric used to capture inequality (e.g., income or ‎wages) appear to affect the nature and strength of the relationship between competition law ‎and inequality. Although the results suggest that the effect of competition law on inequality is ‎generally small, and not always significant, it does not appear immaterial when considered ‎alongside some of the other standard tools and policies used to address inequality.‎