Almost Steady East Asian Rise: Implications for Labour Markets and Income Distribution

Abstract: The extraordinary growth of the East Asian economies during the last fifty years has drawn attention of the economists worldwide. This paper provides a commentary on this epic story. This paper explores the reasons for the extraordinary growth and analysis specific changes which have occurred in income inequality and labour market institutions during this time span. One main conclusion of the paper that contrary to commonly held belief that the globalization and nature of technological progress has been the main cause of increased income inequality in the period after East Asian crises. We conclude that country specific factors were at least as important, if not more so, in this respect. Analysis shows that in addition to varying pattern of income inequality which has not been observed by other commentators have also been major changes in labour market indicators, including unionization and collective bargaining, employment protection, and minimum and real wages. Last part of the paper discusses policy implications.