Does Trade Cause Inequality?
AbstractThis paper examines the effect of international trade on intra-national distribution of income. The empirical validity of any such linkage (between trade-GDP ratio and Gini coefficient of income inequality) is tested in an instrumental variable estimation of cross-country regressions. There are three main findings from a sample of 73 countries in 1985. First, greater participation in trade significantly reduces income inequality. Second, the strong negative association between trade and inequality does not arise because countries that have a more egalitarian distribution of income for reasons other than trade engage in more trade. Third, growth provides a channel through which trade lowers inequality by raising both initial income and subsequent growth.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Chung-Ang Unviersity, Department of Economics in its journal Journal Of Economic Development.
Volume (Year): 25 (2000)
Issue (Month): 2 (December)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Deininger, Klaus & Squire, Lyn, 1998. "New ways of looking at old issues: inequality and growth," Journal of Development Economics, Elsevier, vol. 57(2), pages 259-287.
- Clarke, George R. G., 1995.
"More evidence on income distribution and growth,"
Journal of Development Economics,
Elsevier, vol. 47(2), pages 403-427, August.
- Chakrabarti, Avik, 2003. "A theory of the spatial distribution of foreign direct investment," International Review of Economics & Finance, Elsevier, vol. 12(2), pages 149-169.
- Isabelle Bensidoun & Sébastien Jean & Aude Sztulman, 2011.
"International trade and income distribution: reconsidering the evidence,"
Review of World Economics (Weltwirtschaftliches Archiv),
Springer, vol. 147(4), pages 593-619, November.
- Bensidoun, Isabelle & Jean, Sébastien & Sztulman, Aude, 2011. "International trade and income distribution : reconsidering the evidence," Economics Papers from University Paris Dauphine 123456789/4212, Paris Dauphine University.
- Isabelle Bensidoun & Sébastien Jean & Aude Sztulman, 2005. "International Trade and Income Distribution: Reconsidering the Evidence," Working Papers 2005-17, CEPII research center.
- Felbermayr, Gabriel & Gröschl, Jasmin, 2013.
"Natural disasters and the effect of trade on income: A new panel IV approach,"
European Economic Review,
Elsevier, vol. 58(C), pages 18-30.
- Gabriel J. Felbermayr & Jasmin Gröschl, 2011. "Natural Disasters and the Effect of Trade on Income: A New Panel IV Approach," CESifo Working Paper Series 3541, CESifo Group Munich.
- Felbermayr, Gabriel & Gröschl, Jasmin, 2013. "Natural disasters and the effect of trade on income: A new panel IV approach," Munich Reprints in Economics 20590, University of Munich, Department of Economics.
- Ho, Lok Sang & Wei, Xiangdong & Wong, Wai Chung, 2005. "The effect of outward processing trade on wage inequality: the Hong Kong case," Journal of International Economics, Elsevier, vol. 67(1), pages 241-257, September.
- Jasmin Katrin Gröschl, 2013. "Gravity Model Applications and Macroeconomic Perspectives," ifo Beiträge zur Wirtschaftsforschung, Ifo Institute for Economic Research at the University of Munich, number 48, 8.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Changhui Kang).
If references are entirely missing, you can add them using this form.