Happy to see this article with Evelyne Huber and John D. Stephens published in RIPE (@RIPEJournal). Focusing on 18 post-industrial democracies between 1960 and 2015, we re-examine the relationship bn #financialization and economic #inequality. (1/n) bit.ly/31xCwth 
We make 3 theoretical contributions. First, we identify which aspects of fin sector growth can increase inequality. We posit the shareholder value model of corporate governance (SVM) and the financialization of non-financial firms (FNF) can exacerbate income differentials. (2/n)
SVM raises executive compensation and ensures the largest income gains accrue to the very rich. FNF increases the demand for financial professionals, generating well-paid employment opportunities for financial sector workers and resulting in higher wages in the industry. (3/n)
Second, we identify the specific parts of the income distribution where this effect is likely to occur. We argue that the spread of the SVM exclusively benefits the top 1%. In contrast, FNF boosts the next 9%, or the rest of the top 10%. (4/n)
Third, we posit this effect is contingent on institutional context. The institutional strength of labor mediates the relationship between financialization and inequality. Stronger labor can constrain the rise of the top 1% and boost the earnings of the median worker. (5/n)
In its absence, the expansion of the financial sector concentrates the benefits of rising demand for financial professionals among relatively few highly paying jobs, widening income differentials. (6/n)
Our empirical analysis supports these expectations. We show that a stronger institutional position of labor is associated with a weaker effect of financialization on the top 1% income share. (7/n)
While SVM and FNF drive the top 1% income share up, this impact becomes insignificant at higher values of labor strength. (8/n)
Furthermore, consistent with our argument, SVM does not meaningfully affect the next 9% income share. In contrast, FNF does. Nevertheless, as before, this effect is mediated by the institutional strength of labor. (9/n)
Our article thus shows that the expansion of the financial sector per se does not necessarily lead to higher income inequality. Rather, the institutional context in which the sector develops shapes its distributional consequences. (10/10)
We thank a number of anonymous reviewers, as well as @DoroBohle,@garritzmannj, @FrankNullmeier, and @RolandErne for providing helpful feedback on previous drafts that greatly strengthened our work.
