The Distribution of Gains from Globalization
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Summary:
We study economic globalization as a multidimensional process and investigate its effect on incomes. In a panel of 147 countries during 1970-2014, we apply a new instrumental variable, exploiting globalization’s geographically diffusive character, and find differential gains from globalization both across and within countries: Income gains are substantial for countries at early and medium stages of the globalization process, but the marginal returns diminish as globalization rises, eventually becoming insignificant. Within countries, these gains are concentrated at the top of national income distributions, resulting in rising inequality. We find that domestic policies can mitigate the adverse distributional effects of globalization.
Series:
Working Paper No. 2018/054
Subject:
Economic integration Globalization Income distribution Income inequality National accounts Personal income
English
Publication Date:
March 13, 2018
ISBN/ISSN:
9781484347065/1018-5941
Stock No:
WPIEA2018054
Pages:
66
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