Globalization and Income Distribution: A Specific Factors Continuum Approach

James Anderson

No 14643, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Does globalization widen inequality or increase income risk? In the specific factors continuum model of this paper, globalization widens inequality, amplifying the positive (negative) premia for export (import- competing) sectors. Globalization amplifies the risk from idiosyncratic relative productivity shocks but reduces risk from aggregate shocks to absolute advantage, relative endowments and transfers. Aggregate-shock-induced income risk bears most heavily on the poorest specific factors, while non-traded sectors are insulated. Heterogeneous shocks to firms induce Darwinian competition for sector specific factors that is harsher the more productive the sector. Wage bargaining implies within-sector wage dispersion that falls or rises with export intensity depending on the joint distribution of sectoral and firm shocks.

JEL-codes: F10 (search for similar items in EconPapers)
Date: 2009-01
Note: ITI
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (17)

Published as The Specific Factors Continuum Model, with Implications for Globalization and Income Risk James E. Anderson Revised, July 2011 Journal of International Economics, 85, 174-85.

Downloads: (external link)
http://www.nber.org/papers/w14643.pdf (application/pdf)

Related works:
Working Paper: Globalization and Income Distribution: A Specific Factors Continuum Approach (2008)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:14643

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w14643

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().