Trade, Inequality, and Subjective Well-Being: Getting at the Roots of the Backlash Against Globalization

Barbara Dluhosch

No 741, LIS Working papers from LIS Cross-National Data Center in Luxembourg

Abstract: Many countries in the Western hemisphere are currently experiencing a backlash against globalization. Most of the research examining the issue has concentrated on international specialization and within-country income inequality as main drivers of the backlash. Doing so, the discussion has primarily revolved around the question whether and to what extend the income distribution has widened and whether trade is responsible indeed. However, political trends may be more grounded in perceptions than facts, thus giving rise to inappropriate populist policies. The difference matters all the more as the former may be accentuated by (social) media. Drawing mainly on subjective well-being (SWB) data from theWorld Values Survey (WVS) and income statistics from the Luxembourg Income Study (LIS), this paper shows in an international cross-section analysis that income inequality is perceived very differently depending on openness to trade. The relevance of perceptions has wider politico-economic implications in that it carries the risk of costly anti-trade policies, without necessarily narrowing the income distribution.

Keywords: -Subjective Well-Being; International Trade; Income Distribution; Inequality; Identity (search for similar items in EconPapers)
JEL-codes: D31 D63 F13 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2018-06
New Economics Papers: this item is included in nep-hap, nep-hpe and nep-int
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Published in A revised version of this paper is published as Dluhosch, B. 2021. ""The Role of Perceptions About Trade and Inequality in the Backlash Against Globalization."" SN Business & Economics 1, 167. https://doi.org/10.1007/s43546-021-00171-5

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