The aim of this panel is to explore (1) whether and how policies adopted during the Great Recession have affected economic and social inequality and (2) whether and how these changes triggered political responses. We are particularly interested in the political forces that shaped outcomes because they can explain why fiscal consolidation measures and labor market reforms during the Great Recession did not have easy to predict results.

Fiscal restraint and labour market flexibilization may protect the middle of the income distribution at the cost of the low-income end and thus increase inequality and dualization, respectively. But fiscal measures can also exempt the most disadvantaged from cuts and raise taxes for the rest which would be equalising. Cuts in and fees for public services can have complex distributive effects, depending on who uses these services before and after the policy is implemented, i.e. how cuts or fees are allocated. Similarly, employment protection may be reduced across the board but the abolishing of professional licences may also improve the earnings opportunities for those who were not insiders before. Protest movements and political entrepreneurs can highlight some of these changes and ignore others. We are interested in the nature of the political pressure that makes an increase or decrease of inequality more likely and more salient.

By bringing together researchers who explore developments across a number of countries, this panel aims to improve our understanding of how varied the experience of austerity can be and what can explain it.