Dab owski, Ca a; Kuhls, Sonia
A icle
A Kaleckian app oach o inancializa ion and dis ibu ion:
Aus ia and Finland in compa ison
Wi scha und Gesellscha (WuG)
P o ided in Coope a ion wi h:
Kamme ü A bei e und Anges ell e ü Wien
Sugges ed Ci a ion: Dab owski, Ca a; Kuhls, Sonia (2025) : A Kaleckian app oach o inancializa ion
and dis ibu ion: Aus ia and Finland in compa ison, Wi scha und Gesellscha (WuG), ISSN
0378-5130, Kamme ü A bei e und Anges ell e ü Wien, Wien, Vol. 51, Iss. 1, pp. 79-112,
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79
A Kaleckian app oach o
inancializa ion and dis ibu ion:
Aus ia and Finland in
compa ison
Ca a Dab owski, Sonia Kuhls*
ABSTRACT
In his pape , we examine i and o wha ex en he Kaleckian heo y o ma kup
p icing can explain changes in unc ional income dis ibu ion in an en i on-
men o inancializa ion. Following his app oach, we expec inancializa ion o
in luence he agg ega e wage sha e h ough h ee channels: (1) sec o al ecom-
posi ion, (2) inancial o e head cos s and en ie s’ p o i claims, and (3) ba gain-
ing powe o ade unions and wo ke s. We empi ically analyse he long- e m
ends o each o he channels be o e and a e he Global Financial C isis and
he G ea Recession o Aus ia and Finland. O e all, we ind e idence o all
h ee edis ibu ion channels con ibu ing o he changes in unc ional income
dis ibu ion. Howe e , he explana o y powe o he indi idual channels di e s
s ongly due o he he e ogenei y o he coun ies.
KEYWORDS
Finance-domina ed capi alism, inancializa ion, dis ibu ion, inancial and eco-
nomic c isis, Kaleckian heo y o dis ibu ion
JEL CODES
D31, D33, D43
DOI
10.59288/wug511.273
* Ca a Dab owski: Vienna Ins i u e o In e na ional Economic S udies (wiiw).
Kon ak : dab [email protected]
Sonia Kuhls: Geo g-Augus -Uni e si ä Gö ingen.
Kon ak : sonia.k[email p o ec ed]
80
Dab owski/Kuhls (2025): The inancializa ion-dis ibu ion nexus in Aus ia and Finland
1. In oduc ion
Ample empi ical e idence cap u es a decline in wage sha es ac oss OECD coun ies
since he 1980s, implying a mo e unequal unc ional income dis ibu ion in a ou
o p o i s (e.g. S ockhamme 2017; Hein e al. 2018; Kohle e al. 2019; Guschanksi/
Ona an 2024). To explain he inc easingly unequal unc ional income dis ibu ion,
de ined as he sha es o o al income ha acc ue o di e en social classes such as
wo ke s, manage s, en ie s, and capi alis s, pos -Keynesian and Ma xis schola s
alike poin o neolibe al economic policies which ha e been implemen ed since he
la e 1970s. Financial libe aliza ion and de egula ion in pa icula ga e ise o an
e a o inance-domina ed capi alism (Lapa i sas 2009; Kohle e al. 2019; Akçay e al.
2022).1 The e o e, a g owing body o he e odox schola ship in e oga es he ela ion-
ship be ween income dis ibu ion and inancializa ion, which desc ibes “ he inc eas-
ing ole o inancial mo i es, inancial ma ke s, inancial ac o s and inancial ins i u-
ions in he ope a ion o he domes ic and in e na ional economies” (Eps ein 2005, 3).
A Kaleckian app oach allows us o dis inguish be ween h ee channels h ough which
inancializa ion impac s income sha es (Hein 2015). Fi s , he ising p edominance
o he inancial sec o compa ed o he non- inancial sec o and/o a decline in go -
e nmen in ol emen shi he sec o al composi ion o he economy, which dec eas-
es he economy-wide wage sha e. Second, enla ged managemen sala ies and sha e-
holde p o i claims con ibu e o highe o e head cos s and hus a lowe wage sha e
o di ec labou . Thi d, labou ma ke de egula ion and a shi in co po a e s a -
egies owa ds sha eholde alue o ien a ion and sho - e mism comp omise he
ba gaining powe o ade unions, limi ing hei leeway o bid up eal wages. This
app oach has been u ilized by mul iple au ho s conduc ing compa a i e coun y
s udies as well as panel eg ession analyses (Hein/De ze 2015; Dünhaup 2017; Hein
e al. 2017, 2018; Dünhaup /Hein 2019; Ba adas 2019). We build on hese pape s and
seek o con ibu e o he schola ship on inancializa ion and income inequali y by
examining coun ies ha ha e no ecei ed in-dep h co e age om hese p e ious
s udies. Fu he mo e, we ex end he analysis by placing g ea e emphasis on how
he e ec s o inancializa ion a e media ed by he coun ies’ dis inc wel a e s a es.
The ela ionship be ween he g owing dominance o inancial ma ke s and unc ion-
al income dis ibu ion is no uni o m ac oss all OECD coun ies, wi h no able di e -
ences o ins ance ega ding how hey esponded o he Global Financial C isis (GFC)
o 2007–09 (Hein e al. 2017, 2018). These di e gen pa e ns a ise due o di e en
1 As such, neolibe alism and inancializa ion a e in e wined phenomena, wi h some e en conside-
ing inancializa ion a his o ically speci ic o m o neolibe alism, e med inancial neolibe alism
(Palley 2013). We will adop his b oad unde s anding bu in en ionally a oid an in-dep h heo e ical
discussion. Whe e necessa y, we will cla i y whe he we a e e e ing o neolibe alism in i s gene al
o m as a poli ical and economic philosophy o o i s speci ic mani es a ion as inance-domina ed
capi alism.
81
Wi scha und Gesellscha 51 (1): 79–112
domes ic policy egimes ha espond o and media e he e ec s o inancializa ion
and globaliza ion. We selec ed he wo coun ies o ou analysis in acco dance wi h
he wel a e s a e egimes by Hay/Winco (2012), who e ine he adi ional classi-
ica ion o Esping-Ande sen (1990) and compa e a Con inen al Eu opean/co po a-
i e wel a e egime (Aus ia) wi h a Scandina ian one (Finland). The compa ison
be ween Aus ia and Finland p omises o be pa icula ly enligh ening because, de-
spi e hei di e en wel a e models, bo h exhibi ed expo -led me can ilis g ow h
egimes be o e he GFC. Hein e al. (2021) a gue ha bo h ypes o coun ies coun-
e ed globaliza ion wi h he so-called compensa ion hesis, in which social expendi-
u e was educed o a lesse ex en han in o he egimes o compensa e domes ic los-
e s o globaliza ion. In e es ingly, he coun ies shi ed o di e en g ow h egimes
a e he GFC: Aus ia became weakly expo -led while Finland became a domes ic
demand-led g ow h egime (Hein e al 2021).
The compa a i e case s udy is guided by he o e a ching esea ch ques ion: How
does he ela ionship be ween inancializa ion and unc ional income dis ibu ion di -
e be ween Aus ia and Finland in he pe iod 1995–2019? We d aw on pos -Keynes-
ian heo y o hypo hesize ha each o he h ee Kaleckian channels holds explana-
o y alue o hese coun ies’ inancializa ion-dis ibu ion nexuses. Ne e heless,
in line wi h p e ious empi ical in es iga ions, we expec he ela i e impo ance
o hese channels o di e be ween he coun ies, pa icula ly be o e and a e he
GFC. Ou s udy will in es iga e he esea ch ques ion using desc ip i e empi ical
me hods and da a om a ious sou ces, lea ing causal in e ence o u u e esea ch.
The emainde o he pape is s uc u ed as ollows. In sec ion 2, we delinea e Kaleck-
ian ma kup p icing heo y and de i e h ee channels ha ela e inancializa ion o
unc ional income dis ibu ion. A e discussing he empi ical indings o p e ious
s udies as well as he ins i u ional and poli ical-economic con ex o Aus ia and Fin-
land in sec ion 3, sec ion 4 p esen s ou da a and me hodology and con as s he de-
elopmen o he h ee Kaleckian channels o he wo coun ies in a compa a i e
case s udy. Sec ion 5 comp ises a discussion o hese esul s in ligh o exis ing he-
o e ical and empi ical wo k and answe s he esea ch ques ion. Finally, sec ion 6
concludes he pape .
2. Theo e ical concep s on inancializa ion
and income dis ibu ion
Pos -Keynesian schola s ha e es ablished heo e ical links be ween inancializa ion
and unc ional income dis ibu ion be ween wo ke s and capi alis s h ough Kaleck-
ian ma kup p icing heo y. Acco ding o his app oach, which was i s de eloped by
Kalecki (1954, chap e s 1 & 2, 1971, chap e s 5 & 6), income sha es a e de e mined by
82
Dab owski/Kuhls (2025): The inancializa ion-dis ibu ion nexus in Aus ia and Finland
he ac i e ma kup p icing o i ms wi h a ce ain deg ee o p ice-se ing powe un-
de condi ions o oligopolis ic o monopolis ic compe i ion.2 Speci ically, he ma k-
up is applied o ma ginal cos s, which a e assumed o be cons an un il ull-capaci y
ou pu . In o he wo ds, i ms ma k up cons an a e age a iable cos s, whe e uni
a iable cos s a e cons i u ed by di ec labou cos s and ma e ial cos s. The ma k-
up se es wo pu poses: i s , o se le o e head cos s, including sala ies o o e -
head labou (e.g. managemen ) and dep ecia ion o ixed capi al; and second, o co -
e i ms’ g oss p o i s, including in e es and di idend paymen s as well as e ained
p o i s (Hein 2015, 920–921).
Acco ding o Hein (2015, 922–923), unc ional income dis ibu ion is de e mined
by his p ice-se ing beha iou in he ollowing way. The p icing equa ion o a e -
ically in eg a ed domes ic indus ial o se ice sec o j, which impo s aw ma e-
ials and semi- inished goods and employs capi al and labou , can be o mula ed as:
(1)
whe e pj is he ou pu p ice in sec o j, mj denomina es i s ma kup, w he nominal
wage a e, aj he labou -ou pu a io, p deno es he uni p ice o impo ed aw ma-
e ials o semi- inished p oduc s in o eign cu ency, e is he exchange a e, and µj
he a io be ween impo s and ou pu . Wi h he ela ionship be ween uni ma e ial
cos s and uni labou cos s, zj de i ed as
(2)
we can ew i e he p icing equa ion as:
(3)
Rea anging equa ion (3) esul s in he g oss p o i sha e hj o sec o j in ela ion o
i s g oss alue added:
(4)
Finally, he economy-wide g oss p o i sha e h amoun s o he weigh ed a e age o
he sec o al p o i sha es:
(5)
2 P ices a e cos -de e mined only in he indus ial and se ice sec o s, whe e luc ua ions in demand
can be me by adjus ing ou pu and hence he a e o capi al u iliza ion. In he p ima y and ag icul u-
al sec o s, which will be neglec ed in he ollowing analysis, Kalecki (1954, 11) assumes demand-de e -
mina ion o p ices because i ms mus eac o demand luc ua ions ia p ice-se ing beha iou .
𝑝𝑝!=(1 + 𝑚𝑚!)(𝑤𝑤𝑎𝑎!+ 𝑝𝑝!𝑒𝑒𝜇𝜇!),𝑚𝑚 > 0
𝑧𝑧!=𝑝𝑝"𝑒𝑒𝜇𝜇!
𝑤𝑤𝑎𝑎!
,
𝑝𝑝!= 11 + 𝑚𝑚!23𝑤𝑤𝑎𝑎!11 + 𝑧𝑧!24
ℎ!=11 + 𝑧𝑧!2𝑚𝑚!
11 + 𝑧𝑧!2𝑚𝑚!+ 1
ℎ = (1 + 𝑧𝑧)𝑚𝑚
(1 + 𝑧𝑧)𝑚𝑚 + 1
(1 − ℎ)=1
(1 + 𝑧𝑧)𝑚𝑚 + 1
𝑝𝑝!=(1 + 𝑚𝑚!)(𝑤𝑤𝑎𝑎!+ 𝑝𝑝!𝑒𝑒𝜇𝜇!),𝑚𝑚 > 0
𝑧𝑧!=𝑝𝑝"𝑒𝑒𝜇𝜇!
𝑤𝑤𝑎𝑎!
,
𝑝𝑝!= 11 + 𝑚𝑚!23𝑤𝑤𝑎𝑎!11 + 𝑧𝑧!24
ℎ!=11 + 𝑧𝑧!2𝑚𝑚!
11 + 𝑧𝑧!2𝑚𝑚!+ 1
ℎ = (1 + 𝑧𝑧)𝑚𝑚
(1 + 𝑧𝑧)𝑚𝑚 + 1
(1 − ℎ)=1
(1 + 𝑧𝑧)𝑚𝑚 + 1
𝑝𝑝!=(1 + 𝑚𝑚!)(𝑤𝑤𝑎𝑎!+ 𝑝𝑝!𝑒𝑒𝜇𝜇!),𝑚𝑚 > 0
𝑧𝑧!=𝑝𝑝"𝑒𝑒𝜇𝜇!
𝑤𝑤𝑎𝑎!
,
𝑝𝑝!= 11 + 𝑚𝑚!23𝑤𝑤𝑎𝑎!11 + 𝑧𝑧!24
ℎ!=11 + 𝑧𝑧!2𝑚𝑚!
11 + 𝑧𝑧!2𝑚𝑚!+ 1
ℎ = (1 + 𝑧𝑧)𝑚𝑚
(1 + 𝑧𝑧)𝑚𝑚 + 1
(1 − ℎ)=1
(1 + 𝑧𝑧)𝑚𝑚 + 1
𝑝𝑝!=(1 + 𝑚𝑚!)(𝑤𝑤𝑎𝑎!+ 𝑝𝑝!𝑒𝑒𝜇𝜇!),𝑚𝑚 > 0
𝑧𝑧!=𝑝𝑝"𝑒𝑒𝜇𝜇!
𝑤𝑤𝑎𝑎!
,
𝑝𝑝!= 11 + 𝑚𝑚!23𝑤𝑤𝑎𝑎!11 + 𝑧𝑧!24
ℎ!=11 + 𝑧𝑧!2𝑚𝑚!
11 + 𝑧𝑧!2𝑚𝑚!+ 1
ℎ = (1 + 𝑧𝑧)𝑚𝑚
(1 + 𝑧𝑧)𝑚𝑚 + 1
(1 − ℎ)=1
(1 + 𝑧𝑧)𝑚𝑚 + 1
𝑝𝑝!=(1 + 𝑚𝑚!)(𝑤𝑤𝑎𝑎!+ 𝑝𝑝!𝑒𝑒𝜇𝜇!),𝑚𝑚 > 0
𝑧𝑧!=𝑝𝑝"𝑒𝑒𝜇𝜇!
𝑤𝑤𝑎𝑎!
,
𝑝𝑝!= 11 + 𝑚𝑚!23𝑤𝑤𝑎𝑎!11 + 𝑧𝑧!24
ℎ!=11 + 𝑧𝑧!2𝑚𝑚!
11 + 𝑧𝑧!2𝑚𝑚!+ 1
ℎ = (1 + 𝑧𝑧)𝑚𝑚
(1 + 𝑧𝑧)𝑚𝑚 + 1
(1 − ℎ)=1
(1 + 𝑧𝑧)𝑚𝑚 + 1
83
Wi scha und Gesellscha 51 (1): 79–112
and he ela ed wage sha e o di ec labou (1 − h) can be de i ed as
(6)
The e o e, he dis ibu ion o income be ween p o i s and wages is de e mined by
he ma kup, he a io o uni ma e ial cos s o uni labou cos s, and he economy’s
sec o al composi ion. Assuming cons an echnology, i.e. ᾱ and μ, an inc easing g oss
p o i sha e can hence be he esul o i e mac oeconomic changes: a lowe nominal
wage a e; ising impo p ices o aw ma e ials o in e media e p oduc s denomina -
ed in o eign cu ency; dep ecia ion o he domes ic cu ency; o a shi in sec o al
composi ion owa ds high-p o i -sha e sec o s, esul ing in a la ge economy-wide
p o i sha e by al e ing he sec o s’ espec i e weigh s. Finally, a edis ibu ion o-
wa ds p o i s can be caused by i ms applying la ge ma kups.
Kalecki (1954, 17) iden i ies ou ac o s ha in luence he “deg ee o monopoly” and
hence he size o he ma kup. The i s wo – a posi i e associa ion wi h he deg ee o
concen a ion wi hin he indus y o sec o and a nega i e one wi h he ela i e im-
po ance o p ice compe i ion – can be condensed in o he ca ego y “deg ee o p ice
compe i ion among i ms in he goods ma ke ” Hein (2015, 923). Thi d, he ma kup
is nega i ely ela ed o he powe o ade unions, and ou h, i is posi i ely a ec -
ed by he olume o o e head cos s, which end o squeeze g oss p o i s and p omp
i ms o inc ease he ma kup o mee hei g oss p o i a ge . The uppe pa o a-
ble 2.1 summa izes he i e de e minan s o he p o i sha e which a e ele an in
he con ex o inancializa ion.
Financializa ion is a mul i ace ed phenomenon ha desc ibes a adical shi owa ds
a inance-domina ed accumula ion egime s a ing in he la e 1970s (S ockhamme
2008). A as body o esea ch has iden i ied an a ay o ensuing s uc u al changes
along a ious dimensions o social and economic li e ( o an o e iew, see Eps ein
2015; Van De Zwan 2014); hose ha a e ele an o he p ice-se ing beha iou o
i ms acco ding o Kaleckian heo y a e summa ized as s ylized ac s 1 o 7 in he i s
column o able 1. As men ioned in he in oduc ion, inance-domina ed capi alism
is a p oduc o neolibe al economic policies, wo o whose mos p ominen dimen-
sions a e also explici ly included in he able as s ylized ac s 8 and 9. The po en ial
e ec s o hese nine cha ac e is ics o inance-domina ed capi alism and neolibe -
alism on he g oss p o i sha e a e indica ed by plus and minus signs.
As Hein (2015, 925) poin s ou , wo o he i e channels es ablish ambiguous links be-
ween he s ylized ac s o inancializa ion and he p o i sha e. On he one hand, he
deg ee o p ice compe i ion in he goods ma ke declines as a esul o me ge s and ac-
quisi ions leading o highe indus ial concen a ion; on he o he hand, i may in-
c ease due o he libe aliza ion and globaliza ion o in e na ional inance and ade.
Simila ly, he change in he p ices o impo ed aw ma e ials and in e media e p oduc s
𝑝𝑝!=(1 + 𝑚𝑚!)(𝑤𝑤𝑎𝑎!+ 𝑝𝑝!𝑒𝑒𝜇𝜇!),𝑚𝑚 > 0
𝑧𝑧!=𝑝𝑝"𝑒𝑒𝜇𝜇!
𝑤𝑤𝑎𝑎!
,
𝑝𝑝!= 11 + 𝑚𝑚!23𝑤𝑤𝑎𝑎!11 + 𝑧𝑧!24
ℎ!=11 + 𝑧𝑧!2𝑚𝑚!
11 + 𝑧𝑧!2𝑚𝑚!+ 1
ℎ = (1 + 𝑧𝑧)𝑚𝑚
(1 + 𝑧𝑧)𝑚𝑚 + 1
(1 − ℎ)=1
(1 + 𝑧𝑧)𝑚𝑚 + 1
84
Dab owski/Kuhls (2025): The inancializa ion-dis ibu ion nexus in Aus ia and Finland
in ela ion o wage cos s is unde e mined: while p ices o labou -in ensi e in e me-
dia e p oduc s end o all as i ms eloca e o low-wage egions, hose o aw ma e-
ials end o ise because o inc eased global demand. Since he expec ed e ec s o
hese wo channels a e no clea a p io i, we will ocus on he emaining channels
wi h an unambiguous ela ion o he p o i sha e.
Table 1: Financializa ion, neolibe alism, and he g oss p o i sha e in Kaleckian heo y
S ylized ac s o inan-
cializa ion (1–7) and
neolibe alism
(8–9)
De e minan s o he g oss p o i sha e (including managemen sala ies)
Ma kup
1. Deg ee
o p ice
compe i ion
in he goods
ma ke
2. Ba gaining
powe and
ac i i y
o ade
unions
3. O e head
cos s and
g oss p o i
a ge s
4. P ice o im-
po ed aw
ma e ials
and semi-
inished
p oduc s
5. Sec o al
composi-
ion o he
domes ic
economy
1. Inc easing sha ehol-
de alue o ien a ion
and sho - e mism o
managemen
+ +
2. Rising di idend
paymen s +
3. Inc easing in e es
a es o in e es
paymen s +
4. Inc easing op ma-
nagemen sala ies +
5. Inc easing ele ance
o inancial o non- i-
nancial sec o (in es -
men )
+ +
6. Me ge s and acquisi i-
ons +
7. Libe aliza ion and
globaliza ion o
in e na ional inance
and ade
– + +/– +/–
8. De egula ion o he
labou ma ke +
9. Downsizing o
go e nmen + +
No es: + posi i e e ec on he g oss p o i sha e, – nega i e e ec on he g oss p o i sha e
Sou ce: Hein (2015, 921)
Kaleckian ma kup p icing heo y hence allows us o iden i y h ee channels ha cap-
u e po en ial medium o long- un e ec s o inancializa ion on income edis ibu-
ion owa ds capi alis s. Fi s , i ms a e able o enla ge hei ma kups because he
ba gaining powe and ac i i y o ade unions ha e been ad e sely a ec ed by ou
85
Wi scha und Gesellscha 51 (1): 79–112
de elopmen s: a co po a e go e nance s a egy o non- inancial co po a ions (NFCs)
cen ed on he maximiza ion o sha eholde alue and a ixa ion on sho - e m p o -
i s (Lazonick/O’Sulli an 2002); he ising impo ance o inancial is-à- is p oduc-
i e in es men a ou ing he inancial sec o (K ippne 2005), whe e unioniza ion
is adi ionally signi ican ly lowe ; libe aliza ion and globaliza ion leading o in en-
si ied compe i ion wi h low-wage egions and h ea s o ou sou cing and eloca ion;
and he dominan policy pa adigm since he la e 1970s – neolibe alism – de egula -
ing labou ma ke s and es ic ing go e nmen in e en ion, which signi ican ly
inc eased unemploymen and e oded he ba gaining powe o ade unions (S ock-
hamme 2004, chap e 4; Whalen 2021).
Second, o e head cos s and g oss p o i a ge s ha e inc eased h ough inancializa-
ion and he e o e exe ed a posi i e in luence on ma kups and he g oss p o i sha e.
Mos impo an ly, he co po a e managemen s a egy o “downsize and dis ibu e”
(Lazonick/O’Sulli an 2002) o enhance sho - e m inancial p o i s equi es a la g-
e sha e o i ms’ e enues going owa ds di idend and in e es paymen s (Dalle y
2009). Mo eo e , schola s ha e obse ed a disp opo iona e ise in ( op) manage-
men sala ies accompanying inancializa ion (Hein 2015), sugges ing ha i ms will
cha ge la ge ma kups o co e hese inc eased o e head cos s.
The hi d channel e e s o changes in he sec o al composi ion o he economy e-
lec ed in an expanded sha e o he inancial sec o in o al alue added ela i e o
he NFC sec o as well as diminished go e nmen ac i i y. These wo e ec s impac
an economy’s o e all p o i sha e posi i ely i he sec o al p o i sha e is assumed
o be highe in he inancial han in he NFC sec o , gi en ha i is by de ini ion ze o
in he go e nmen sec o (Dünhaup 2012).
3. Li e a u e e iew
The pos -Keynesian app oach p esen ed in he p e ious sec ion allows us o dis in-
guish be ween h ee ansmission channels om inancializa ion and neolibe alism
owa ds unc ional income dis ibu ion. Ye , inancializa ion is no a uni o m phe-
nomenon – a he , he dis inc his o ical, ins i u ional, and social cha ac e is ics o
each coun y decisi ely shape i s inancializa ion ajec o y (Becke e al. 2010) and
po en ially i s ela ionship o income dis ibu ion. The e o e, i is o pa amoun im-
po ance o conside coun y-le el speci ici ies. To ha end, his sec ion p o ides he
ounda ion o a compa a i e coun y s udy by, i s , e iewing key indings om
p e ious empi ical esea ch and, second, delinea ing he ins i u ional cha ac e is-
ics and poli ical-economic s uc u es o Aus ia and Finland.
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Dab owski/Kuhls (2025): The inancializa ion-dis ibu ion nexus in Aus ia and Finland
3.1 Empi ical li e a u e on he pos ula ed nexus
Nume ous empi ical s udies ha e eco ded a gene al end o unc ional income
edis ibu ion a he expense o labou and in a ou o capi al in mos ad anced
capi alis coun ies since he 1980s, and hence concu en wi h neolibe alism and
inance-domina ed capi alism (e.g. S ockhamme 2017; Hein e al. 2018; Kohle e al.
2019).3 In his sec ion, we hus su ey he empi ical li e a u e o de e mine he d i -
ing o ces behind his end. Taking he Kaleckian heo y o p icing and unc ion-
al income dis ibu ion as ou an age poin , we i s compile e idence o he h ee
channels iden i ied by Hein (2015) and hen gi e an o e iew o he in-dep h s udies
o coun ies ha ha e employed his app oach o da e.
Dünhaup (2012) was he i s o p esen e idence o he channel cap u ing changes
in he sec o al composi ion o he domes ic economy. Speci ically, she demons a ed
ha an inc easing sha e o inancial co po a ions in alue added aised he econo-
my-wide g oss p o i sha e in he US (1970–2008). The dec eased labou sha e o in-
come in Ge many (1980–2008), meanwhile, is la gely due o he alling wage sha e in
NFCs hemsel es, while a small shi owa ds he inancial sec o ook place only in
he 2000s. The ele ance o his channel was u he con i med by nume ous coun-
y-speci ic s udies o which we will e u n la e .
Rega ding he second channel, inc easing o e head cos s and g oss p o i a ge s
ha e been esea ched in much mo e de ail. The i s wa e o s udies by Eps ein/
Powe (2003), Eps ein/Jayade (2005), Dumenil/Le y (2005), and Lin/Tomasko -
ic-De ey (2013) gene ally de ec a nega i e ela ionship be ween en ie s’ inan-
cial ea nings/ i ms’ inancial paymen s and he wage sha e. O e all, “ hese esul s
s ongly sugges ha neolibe alism and inancialisa ion pay o hose owning i-
nancial asse s” (Eps ein/Jayade 2005, 67). Howe e , Dünhaup (2012) con ends ha
hese s udies neglec he di idend paymen s o NFCs o p i a e households. She
he e o e spli s he p o i sha e in o e ained ea nings and ne p ope y income
and inds ha in Ge many, he con inuous inc ease in he en ie s’ sha e since he
1990s p ima ily esul s om an inc easing sha e o di idend income. In he US, he
en ie s’ income sha e inc eased in he 1980s – mainly due o ne in e es income –
and emained cons an he ea e , while he sha e o ne di idend income became
mo e p onounced. In an econome ic s udy o Ge many and he US (1960–2007),
Hein/Schode (2011) examine he ole o in e es paymen s speci ically. They ind
a signi ican and s ong e ec o ne in e es paymen s o NFCs on he p o i sha e,
lending e idence o a ma kup ha is elas ic o in e es paymen s which in luences
3 Fu he mo e, au ho s ha e a es ed o ising pe sonal income dis ibu ion inequali y due o deepe-
ning inancialisa ion in mos OECD coun ies (Dünhaup 2014; Hube e al. 2022). The da a also e eal
ising inequali y ega ding disposable income, i. e. ma ke income ne o axes and social policies, in
mos o hese coun ies – excep o Belgium, F ance, G eece, I eland, and Spain (Hein 2015).
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Wi scha und Gesellscha 51 (1): 79–112
p essu e on wo ke s’ income claims. Fo hese indica o s, we spli he ime ame in-
o i e-yea pe iods and calcula e espec i e a e ages. Since ou esea ch in e es
is ela ed o medium- and long- e m ends o income dis ibu ion, he desc ip i e
compa a i e analysis abs ac s om cyclical a ia ions in he da a.
4.2 Redis ibu i e ends in 1995–2019
Be o e in es iga ing he edis ibu i e e ec s o he Kaleckian channels in he wo
coun y s udies, we mus inspec he edis ibu i e ends be o e and a e he GFC.
Acco ding o he li e a u e, he pe iod om he la e 1970s/ea ly 1980s un il he c i-
sis was ma ked by a edis ibu ion om labou o capi al (Hein e al. 2018). This p o-
cess is illus a ed in igu e 1, which displays he de elopmen o he adjus ed wage
sha e o bo h coun ies in 1960–2019.
Figu e 1: Adjus ed wage sha e in Aus ia and Finland, 1980–2019 (% o GDP)
No e: The adjus ed wage sha e is de ined as compensa ion pe employee as a sha e o GDP a ac o cos s
pe pe son employed (Hein e al. 2018, 3)
Sou ce: Eu opean Commission (2023a), au ho s’ calcula ions
Excep o some cyclical luc ua ions, bo h coun ies expe ienced a alling adjus ed
wage sha e in he gi en pe iod. The dec ease was especially p onounced be ween
he ea ly 1980s and he GFC. Du ing he mo e limi ed pe iod speci ied in he esea ch
ques ion, 1995–2019, Aus ia’s adjus ed wage sha e ollowed a U-shape: i declined
s eadily be ween 1995 and he GFC, bu pa ially ebounded du ing he c isis. This
94
Dab owski/Kuhls (2025): The inancializa ion-dis ibu ion nexus in Aus ia and Finland
coun e cyclical pa e n o he wage sha e is a well-documen ed phenomenon ha a is-
es because p o i s end o decline mo e sha ply han wages du ing economic down-
u ns, gi en ha he la e a e ela i ely igid due o con ac ual ag eemen s and
ins i u ional ac o s (Hein 2014). A e he c isis, he wage sha e emained oughly
cons an a 55%, such ha we can cau iously speak o a pa ial e e sal o he p e i-
ous decline. A compa able downwa d end om 1995 un il he c isis can be obse ed
o Finland. Howe e , a e a simila eco e y du ing he GFC, which empo a ily
e-es ablished i s 1995 le el, he Finnish adjus ed wage sha e ell back o i s p e-c isis
le el o oughly 53%. The e o e, wi h ega d o he medium- o long- e m end, he
Finnish wage sha e co esponds o he shape o a nega i e loga i hmic unc ion. In
con as o he si ua ion in Aus ia, he c isis-induced gains could no be sus ained.
Figu e 2: Top 1% o income sha e in Aus ia and Finland, 1980–2019 (sha e o p e- ax
income)
No e: Top income sha es ela e o he ax uni s
Sou ce: WID (2025), au ho s’ calcula ions
As explained in sec ion 2, pos -Keynesian heo y s ipula es ha o e head labou
cos s (i.e. managemen sala ies) a e co e ed by ma kups and should hus be consid-
e ed pa o he p o i sha e. Howe e , na ional accoun s eco d managemen sala-
ies as pa o employee compensa ion, such ha hey a e inco po a ed in o he cal-
cula ion o he wage sha e. As a esul , esea che s ha e poin ed ou ha he sha e
o di ec labou – excluding op managemen sala ies – has declined e en mo e d a-
ma ically han can be obse ed h ough con en ional measu es such as he adjus -
ed wage sha e (e.g. Hein/De ze 2015).
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Wi scha und Gesellscha 51 (1): 79–112
To emedy his, igu e 2 isualizes he income sha e o he op 1% o income ea ne s,
which p oxies manage ial sala ies, in bo h economies. Excep o a sligh decline
du ing he yea s o he GFC, op ea ne s’ income sha e appea s o be ela i ely s a-
ble in Aus ia; i any hing, i has dec eased o e he obse ed pe iod. In Finland, he
sha e o op 1% o income ea ne s inc eased sha ply du ing i s 1990s c isis, peaked in
2000 and subsequen ly s a ed o decline. F om hen on, he sha e ollowed a U-shape
ha eached i s ough a he end o he GFC. Looking a he speci ied ime ame,
he sha e has now app oxima ely e u ned o i s 1995 le el. This de elopmen con-
i ms ha he adjus ed wage sha e should be in e p e ed as an uppe bound on he
ac ual le el o he wage sha e: co ec ed o hese manage ial sala ies, he Finnish
wage sha e would ha e dec eased e en u he in he pe iods 1995–2000 and 2013–
2017. The sha e o di ec labou in Aus ia, oo, is lowe han indica ed by he adjus -
ed wage sha e; bu he la e ’s de elopmen is no s ongly in luenced by changing
managemen sala ies. O e all, i is impo an o bea in mind ha he da a we use
s uc u ally o e es ima e he wage sha e.
4.3 Aus ia
In he ollowing, we discuss he in luence o inancializa ion ope a ing h ough he
h ee channels acco ding o Kaleckian heo y in Aus ia. We i s conside he p e-
2008/09 dynamics and hen add ess he de elopmen s a e he c isis.
Aus ia be o e he c isis
As ou lined abo e, Aus ia expe ienced a all in he adjus ed wage sha e be o e he
GFC, indica ing a mo e unequal unc ional income dis ibu ion. Howe e , we do
no ind e idence ha he sec o al composi ion changed in a ou o he inancial
sec o o a he de imen o he go e nmen sec o , as bo h sha es in alue added
emained oughly cons an ( igu e 3). Ins ead, he sha e o he non- inancial sec-
o exhibi s an inc easing end while he sha e o he household sec o declined in
he yea s be o e he c isis. Con a y o wha is assumed in he li e a u e, he inan-
cial sec o ’s p o i sha e – p oxied by i s sha e o g oss ope a ing su plus in g oss
alue added– was lowe han ha o he non- inancial sec o ( igu e 4). The non- i-
nancial sec o ’s p o i sha e can be desc ibed as an in e ed U-shape o e he en-
i e ime pe iod, wi h i s peak a he s a o he GFC. The e o e, NFCs’ p o i sha e
inc eased s eadily in he yea s be o e he c isis while ha o inancial co po a ions
did no ollow a clea end. Conside ing hese de elopmen s oge he , ce e is pa-
ibus, he change in sec o composi ion dec eased he agg ega ed wage sha e and
inc eased he agg ega ed p o i sha e, i – ollowing Hein e al. (2018) – we assume
ha he adjus ed wage sha e was highe in he household sec o han in he co po-
a e sec o . Howe e , nei he he inancial no he go e nmen sec o was pa o
his edis ibu ion.
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Dab owski/Kuhls (2025): The inancializa ion-dis ibu ion nexus in Aus ia and Finland
Wi h ega d o he second channel, he inancial o e head cos s/ en ie s’ p o i claims
channel, we conside wo indica o s. S a ing wi h he income sha es in ne na ion-
al income, we obse e a sligh dec ease in he compensa ion o employees and an in-
c ease in bo h he ne p ope y income sha e and he sha e o e ained ea nings in
he yea s be o e he c isis ( igu e 5). Thus, he dec easing wage sha e occu ed pa -
ly in a ou o en ie s’ p o i claims. When decomposing he en ie s’ income sha e,
i becomes clea ha he inc ease was exclusi ely d i en by he ise in di idend in-
come: while he sha e o ne in e es and p ope y income was oughly cons an in
he yea s be o e he c isis, he sha e o di idends inc eased s eeply du ing he ea -
ly 2000s ( igu e 6). This indica es a ise in he powe o inance and sha eholde s in
Aus ia du ing his pe iod, p o iding e idence o he second channel.
We ind some e idence o he hi d channel, he dep ession o ade unions’ and
wo ke s’ ba gaining powe ( able 2). On he one hand, he unemploymen a e in
Aus ia was qui e low in he yea s be o e he c isis while he ba gaining co e age
a e was e y high h oughou he whole pe iod. On he o he hand, union densi y
dec eased in he p e-c isis pe iod while he household deb o GDP a io inc eased
by almos en pe cen age poin s. Fu he mo e, ade openness inc eased sha ply.
Table 2: Selec ed indica o s o ba gaining powe , Aus ia, 1995–2019
1995–99 2000–04 2005–09 2010–14 2015–19
Unemploymen a e (%) 4.6 4.5 5.4 5.4 5.7
Union densi y a e (%) 39.3 35.7 30.9 28.1 26.7
Ba gaining co e age a e (%) 98.0 98.0 98.0 98.0 98.0
Household deb (% o GDP) 42.9 46.1 52.3 52.4 50.3
T ade openness (% o GDP) 73.7 87.4 96.4 103.4 104.8
No es: Unemploymen as a pe cen age o ac i e popula ion; ba gaining (o union) co e age a e:
p opo ion o employees who a e co e ed by (collec i e) wage ag eemen s (adjus ed o sec o s wi hou
ba gaining igh s); union densi y a e: p opo ion o employees who a e membe s o a ade union among
all employees; ade openness: impo s and expo s as a sha e o GDP
Sou ce: OECD (2023), OECD and AIAS (2021), and Eu opean Commission (2023b), au ho s’ calcula ions
Aus ia in he cou se o and a e he c isis
In he cou se o he c isis, he Aus ian adjus ed wage sha e expe ienced an upwa d
end bu emained oughly cons an a e wa d. Wi h ega d o sec o al composi-
ion, he sha e o he go e nmen inc eased sligh ly in he cou se o he c isis bu e-
mained oughly cons an a e wa ds. The sha e o NFCs dec eased du ing he c i-
sis bu eco e ed quickly and he inancial sec o expe ienced a minimal dec ease
du ing he c isis bu has emained a he cons an e e since ( igu e 3). Addi ion-
ally, he p o i sha e in he inancial sec o emained below ha o he non- inancial
sec o ( igu e 4). Howe e , while he p o i sha e o he non- inancial sec o declined
s eadily om 2007 onwa ds, he inancial sec o ’s p o i sha e ollowed a U-shaped
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Wi scha und Gesellscha 51 (1): 79–112
Figu e 3: Sec o al sha es in nominal g oss alue added, Aus ia, 1995–2019
Sou ce: OECD (2023), au ho s’ calcula ions
Figu e 4: Sec o g oss ope a ing su plus as a sha e o sec o g oss alue added,
Aus ia, 1995–2019
Sou ce: OECD (2023), au ho s’ calcula ions
98
Dab owski/Kuhls (2025): The inancializa ion-dis ibu ion nexus in Aus ia and Finland
Figu e 5: Income sha es in ne na ional income, Aus ia, 1995–2019
Sou ce: OECD (2023), au ho s’ calcula ions
Figu e 6: Componen s o en ie s’ income as a sha e in ne na ional income, Aus ia,
1995–2019
Sou ce: OECD (2023), au ho s’ calcula ions
99
Wi scha und Gesellscha 51 (1): 79–112
pa e n, beginning o ise a e he eco e y om he GFC. In he yea s immedia ely
ollowing he c isis, he e o e, he gap be ween he wo sha es widened signi ican -
ly, bu i subsequen ly na owed once mo e. As a esul , his channel con ibu ed o
he sligh inc ease in he wage sha e du ing he c isis bu los ele ance he ea e .
The p essu e om he o e head cos s channel seems o ha e dec eased du ing he
c isis, as compensa ion o employees ose while ne p ope y income dec eased ( ig-
u e 5). Mo eo e , di idend income and ne in e es income bo h dec eased s ongly
du ing and a e he c isis ( igu e 6). These dynamics may ha e con ibu ed o he
sligh inc ease in he Aus ian wage sha e.
Wo ke s’ ba gaining powe shows a declining endency in he pos -c isis pe iod ( a-
ble 2): unemploymen , he ba gaining co e age a e, and he household deb o GDP
a io emained la gely cons an while union densi y dec eased sligh ly and ade
openness inc eased u he .
4.4 Finland
As no ed abo e, he Finnish economy expe ienced a all in he adjus ed wage sha e
be o e he c isis. I hen inc eased du ing he GFC bu dec eased om 2012 onwa ds.
Finland be o e he c isis
The dis ibu ional e ec s o he sec o al composi ion channel a e e lec ed in igu e
7 and igu e 8. The non- inancial co po a e sha e in alue added inc eased un il he
ea ly 2000s and emained oughly cons an un il he GFC. In pa allel, inancial co -
po a ions’ sha e dec eased sligh ly in he la e 1990s and emained oughly cons an
un il he c isis. The go e nmen sec o beha ed con a y o he non- inancial co po-
a e sec o , as i s sha e in g oss alue added dec eased be ween 1995 and 2009. The
household and non-p o i sec o emained la gely cons an h oughou his pe iod.
Excep o one signi ican dec ease in he ea ly 2000s, he p o i sha e o he inan-
cial sec o exceeded ha o he non- inancial sec o in he p e-c isis pe iod. The e-
o e, we ind pa ial e idence o he sec o al composi ion channel s a ing in he
mid-1990s: ce e is pa ibus, he sec o al ecomposi ion led o a dec ease in he wage
sha e because he NFC sec o inc eased a he expense o he go e nmen sec o
while he o me ’s p o i sha e inc eased s eadily. Howe e , he dep ession o he
wage sha e was no d i en by he change in he ela i e size o he inancial sec o .
Conside ing he inancial o e head cos s/ en ie s’ p o i claims channel o Finland,
we ind only a e y sligh inc ease in ne p ope y income as a sha e o na ional in-
come un il he ea ly 2000s, emaining oughly cons an he ea e ( igu e 9). The
compensa ion o employees dec eased in he ea ly 1990s and did no eco e un il
he c isis, while he opposi e is he case wi h ega d o e ained ea nings as a sha e
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Dab owski/Kuhls (2025): The inancializa ion-dis ibu ion nexus in Aus ia and Finland
o na ional income, which inc eased un il he ea ly 2000s. The decomposed sha es
o en ie s’ income a e e y ola ile: he sha es o di idends and p ope y income
expe ienced a posi i e end o e all, while ha o ne in e es income declined be-
o e he c isis ( igu e 10). In conjunc ion, hese indings indica e ha he dep es-
sion o he wage sha e was no s ongly d i en by inc easing en ie s’ p o i claims.
Ou indings ega ding ade unions’ and wo ke s’ ba gaining powe a e ambigu-
ous ( able 3). The unemploymen a e was ela i ely high du ing and a e he Finn-
ish inancial c isis (1995–1999) bu dec eased in he subsequen pe iods. Simul ane-
ously, he p opo ion o employees who we e membe s o a ade union dec eased
in he gi en pe iod while ba gaining co e age inc eased. Bo h he household deb o
GDP a io and ade openness inc eased signi ican ly in he pe iods be o e he c isis.
Table 3: Selec ed indica o s o ba gaining powe , Finland, 1995–2019
1995–99 2000–04 2005–09 2010–14 2015–2019
Unemploymen a e (%) 13 9.3 7.6 8.3 8.3
Union densi y a e (%) 78.2 74.9 71.6 69.1 63.0
Ba gaining co e age a e (%) 83.0 89.1 87.6 91.9 88.8
Household deb (% o GDP) 32.1 35.0 50.2 60.6 64.6
T ade openness (% o GDP) 66.2 70.7 79.5 76.9 75.0
No es: Unemploymen as a pe cen age o ac i e popula ion; ba gaining (o union) co e age a e:
p opo ion o employees who a e co e ed by (collec i e) wage ag eemen s (adjus ed o sec o s wi hou
ba gaining igh s); union densi y a e: p opo ion o employees who a e membe s o a ade union among
all employees; ade openness: impo s and expo s as a sha e o GDP
Sou ce: OECD (2023), OECD and AIAS (2021), and Eu opean Commission (2023b), au ho s’ calcula ions
Finland in he cou se o and a e he c isis
While he sec o al sha es o inancial co po a ions and households emained a h-
e cons an du ing and a e he c isis, he sha e o non- inancial co po a ions de-
c eased du ing he c isis and emained a a lowe le el a e wa ds ( igu e 7). The
sha e o he go e nmen sec o inc eased sligh ly bu s ayed oughly cons an in
he ollowing yea s. Simul aneously, inancial co po a ions’ p o i sha e dec eased
sha ply in he cou se o he c isis bu s a ed ising in 2013, esuming p e-c isis le -
els igh be o e he Co id-19 pandemic ( igu e 8). Fu he mo e, o mos yea s, he
p o i sha e in he inancial sec o was highe han in he non- inancial sec o . Hence,
he inc ease in he go e nmen sec o and he all o he p o i sha e in he inancial
sec o ha e p esumably inc eased he economy-wide wage sha e.
We ind no e idence o he inancial o e head cos s channel. While he compensa ion
o employees inc eased du ing he c isis, mi o ed by a dec ease in e ained ea n-
ings, he sha e o ne p ope y income emained oughly cons an ( igu e 9). Di i-
dend income s a ed inc easing in he mid-2010s and while ne in e es income ose
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Wi scha und Gesellscha 51 (1): 79–112
Figu e 7: Sec o al sha es in nominal g oss alue added, Finland, 1995–2019
Sou ce: OECD (2023), au ho s’ calcula ions
Figu e 8: Sec o g oss ope a ing su plus as a sha e o sec o g oss alue added, Fin-
land, 1995–2019
Sou ce: OECD (2023), au ho s’ calcula ions
102
Dab owski/Kuhls (2025): The inancializa ion-dis ibu ion nexus in Aus ia and Finland
Figu e 9: Income sha es in ne na ional income, Finland, 1995–2019
Sou ce: OECD (2023), au ho s’ calcula ions
Figu e 10: Componen s o en ie s’ income as a sha e in ne na ional income, Fin-
land, 1995–2019
Sou ce: OECD (2023), au ho s’ calcula ions
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Wi scha und Gesellscha 51 (1): 79–112
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