Globalization and Income Inequality Revisited
Florian Dorn (),
Clemens Fuest () and
Niklas Potrafke ()
No 247, ifo Working Paper Series from ifo Institute - Leibniz Institute for Economic Research at the University of Munich
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.
Keywords: Globalization; income inequality; redistribution; instrumental variable estimation; panel econometrics; development levels; transition economies; China (search for similar items in EconPapers)
JEL-codes: D31 D63 F02 F60 C26 H11 H20 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dev, nep-his and nep-int
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Working Paper: Globalization and Income Inequality Revisited (2018)
Working Paper: Globalisation and Income Inequality Revisited (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ifowps:_247
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