Do economic liberalization and globalization increase income inequality?
AbstractUsing the newly developed KOF-index of globalization, as well as the economic freedom index from the Fraser institute, we examine if globalization and economic liberalizations are linked to increases in income inequality within countries. Studying changes between 1980 and 2000, we find a positive link between inequality and liberalization only for certain types of reforms: Trade liberalizations, deregulation of product and labor markets and economic globalization. The Scandinavian welfare states have increased economic freedom and globalization more than other countries, but they have also experienced high increases in income inequality.
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Bibliographic InfoPaper provided by Lund University, Department of Economics in its series Working Papers with number 2008:12.
Length: 22 pages
Date of creation: 12 Sep 2008
Date of revision:
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Postal: Department of Economics, School of Economics and Management, Lund University, Box 7082, S-220 07 Lund,Sweden
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Economic freedom; Globalization; Income Inequality; Gini Coefficient; Welfare states;
Find related papers by JEL classification:
- D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
- O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
- P51 - Economic Systems - - Comparative Economic Systems - - - Comparative Analysis of Economic Systems
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-09-20 (All new papers)
- NEP-ECM-2008-09-20 (Econometrics)
- NEP-ORE-2008-09-20 (Operations Research)
- NEP-UPT-2008-09-20 (Utility Models & Prospect Theory)
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