Globalization and Income Inequality Revisited

Arbeitspapier

This paper re-examines the link between globalization and income inequality. We use data for 140 countries over the period 1970-2014 and employ an IV approach to deal with the endogeneity of globalization measures. We find that the link between globalization and income inequality differs across different groups of countries. There is a robust positive relationship between globalization and inequality in the transition countries including China and most countries of Middle and Eastern Europe. In the sample of the most advanced economies, neither OLS nor 2SLS results show any significant positive relationship between globalization and inequality. We conclude that institutions providing income insurance and education, which characterize most advanced economies but are less developed in transition economies, may have moderated effects of globalization on income inequality.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 6859

Classification and Topics

• Classification: Wirtschaft ; Personal Income, Wealth, and Their Distributions ; Equity, Justice, Inequality, and Other Normative Criteria and Measurement ; International Economic Order and Integration ; Economic Impacts of Globalization: General ; Single Equation Models: Single Variables: Instrumental Variables (IV) Estimation ; Structure, Scope, and Performance of Government ; Taxation, Subsidies, and Revenue: General
• Subject: globalization ; income inequality ; redistribution ; instrumental variable estimation ; panel econometrics ; development levels ; transition economies ; China

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Dorn, Florian ; Fuest, Clemens ; Potrafke, Niklas
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2018

Further information

• Handle: http://hdl.handle.net/10419/174982
• Last update: 10.03.2025, 11:44 AM CET