Advanced Search
MyIDEAS: Login to save this paper or follow this series

Globalization, Inequality, and the Rich Countries of the G-20: Evidence from the Luxembourg Income Study (LIS)

Contents:

Author Info

  • Timothy M. Smeeding
Registered author(s):

    Abstract

    The purpose of this study is to summarize and comment upon what we know about the determinants of both the level and trend in economic inequality over the past two decades, and to relate these findings to the progress of globalization in these nations. While the fruits of economic progress in rich nations have not been equally spread, we argue that most citizens inrich Organization for Economic Cooperation and Development (OECD) nations have benefited from the trend toward global economic progress. We begin with a summary of the differences in overall economic inequality within the G-20 nations based on LIS (Luxembourg Income Study) data and recent work by others. Here we find that social policies, wage distributions, time worked, social and labor institutions, and demographic differences all have some influence on why there are large differences in inequality among rich nations at any point in time. In contrast, trade policy has not been shown to have any major impact on economic inequality. Next we turn to trends in inequality. We find modest and sometimes dissimilar changes in the distribution of income have taken place within most advanced nations, with most finding a higher level of inequality in the mid to late 1990s than in the 1980s. Inequality, however, has not risen markedly in some nations (e.g., Denmark, Germany, France, and Canada) over this period, while its rise has slowed in several other nations during the late 1990s. The explanations for rising inequality in rich countries are many, and no one single set of explanations is ultimately convincing. In particular, there is no evidence that we know of that trade and globalization is bad for rich countries. This suggests that rising economic inequality is not inevitable, or that it necessarily hurts low-skill, low-income families. Rather, it suggests that globalization does not force any single outcome on any country. Domestic policies and institutions still have large effects on the level and trend of inequality within rich and middle-income nations, even in a globalizing world economy.

    Download Info

    If 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.
    File URL: http://www.maxwell.syr.edu/uploadedFiles/cpr/publications/working_papers2/wp48.pdf
    Download Restriction: no

    Bibliographic Info

    Paper provided by Center for Policy Research, Maxwell School, Syracuse University in its series Center for Policy Research Working Papers with number 48.

    as in new window
    Length: 44 pages
    Date of creation: Nov 2002
    Date of revision:
    Handle: RePEc:max:cprwps:48

    Contact details of provider:
    Postal: 426 Eggers Hall, Syracuse, New York USA 13244-1020
    Phone: (315) 443-3114
    Fax: (315) 443-1081
    Email:
    Web page: http://www.maxwell.syr.edu/cpr.aspx
    More information through EDIRC

    Related research

    Keywords:

    Find related papers by JEL classification:

    References

    References listed on IDEAS
    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.:
    as in new window
    1. Klaus Deininger & Lyn Squire, 1996. "A New Data Set Measuring Income Inequality," CEMA Working Papers 512, China Economics and Management Academy, Central University of Finance and Economics.
    2. Paul Beaudry & David Green, 2000. "The Changing Structure of Wages in the US and Germany: What Explains the Differences?," NBER Working Papers 7697, National Bureau of Economic Research, Inc.
    3. Daron Acemoglu, 2002. "Cross-Country Inequality Trends," NBER Working Papers 8832, National Bureau of Economic Research, Inc.
    4. Xavier Sala-i-Martin, 2002. "The disturbing "rise" of global income inequality," Discussion Papers 0102-44, Columbia University, Department of Economics.
    5. Buhmann, Brigitte, et al, 1988. "Equivalence Scales, Well-Being, Inequality, and Poverty: Sensitivity Estimates across Ten Countries Using the Luxembourg Income Study (LIS) Database," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 34(2), pages 115-42, June.
    6. Paul Gertler & Jonathan Gruber, 1997. "Insuring Consumption Against Illness," NBER Working Papers 6035, National Bureau of Economic Research, Inc.
    7. David Card & John E. DiNardo, 2002. "Skill-Biased Technological Change and Rising Wage Inequality: Some Problems and Puzzles," Journal of Labor Economics, University of Chicago Press, vol. 20(4), pages 733-783, October.
    8. van Praag, Bernard M S & Hagenaars, Aldi J M & van Weeren, Hans, 1982. "Poverty in Europe," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 28(3), pages 345-59, September.
    9. Gottschalk, Peter & Smeeding, Timothy M., 2000. "Empirical evidence on income inequality in industrialized countries," Handbook of Income Distribution, in: A.B. Atkinson & F. Bourguignon (ed.), Handbook of Income Distribution, edition 1, volume 1, chapter 5, pages 261-307 Elsevier.
    10. Smeeding, Timothy M & Sullivan, Dennis H, 1998. "Generations and the Distribution of Economic Well-Being: A Cross-National View," American Economic Review, American Economic Association, vol. 88(2), pages 254-58, May.
    11. Beblo, Miriam & Knaus, Thomas, 2000. "Measuring Income Inequality in Euroland," IRISS Working Paper Series 2000-10, IRISS at CEPS/INSTEAD.
    12. Osberg, L., 2000. "Long Run Trends in Economic Inequality in Five Countries - a Birth Cohort View," Department of Economics at Dalhousie University working papers archive 2000-1, Dalhousie, Department of Economics.
    13. Peter Gottschalk & Mary Joyce, 1997. "Cross-National Differences in the Rise in Earnings Inequality: Market and Institutional Factors," Boston College Working Papers in Economics 366, Boston College Department of Economics.
    14. Dan Devroye & Richard B. Freeman, 2002. "Does inequality in skills explain inequality of earnings across advanced countries?," LSE Research Online Documents on Economics 20058, London School of Economics and Political Science, LSE Library.
    15. Quah, Danny, 2002. "One Third of the World's Growth and Inequality," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
    16. Deininger, K & Squire, L, 1996. "Measuring Income Inequality : A New Data-Base," Papers 537, Harvard - Institute for International Development.
    17. Francine D. Blau & Lawrence M. Kahn, 2005. "Do Cognitive Test Scores Explain Higher U.S. Wage Inequality?," The Review of Economics and Statistics, MIT Press, vol. 87(1), pages 184-193, February.
    18. Andrea Brandolini & Anthony B. Atkinson, 2001. "Promise and Pitfalls in the Use of "Secondary" Data-Sets: Income Inequality in OECD Countries As a Case Study," Journal of Economic Literature, American Economic Association, vol. 39(3), pages 771-799, September.
    19. Peter Gottschalk & Timothy M. Smeeding, 1997. "Cross-National Comparisons of Earnings and Income Inequality," Journal of Economic Literature, American Economic Association, vol. 35(2), pages 633-687, June.
    20. Lars Osberg & Andrew Sharpe, 2002. "International Comparisons of Trends in Economic Well-being," Social Indicators Research, Springer, vol. 58(1), pages 349-382, June.
    21. Steve Dowrick & Muhammad Akmal, 2005. "Contradictory Trends In Global Income Inequality: A Tale Of Two Biases ," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 51(2), pages 201-229, 06.
    22. Miguel Székely & Marianne Hilgert, 1999. "What's Behind the Inequality We Measure: An Investigation Using Latin American Data," IDB Publications 6458, Inter-American Development Bank.
    23. Michael F. Förster, 2000. "Trends and Driving Factors in Income Distribution and Poverty in the OECD Area," OECD Labour Market and Social Policy Occasional Papers 42, OECD Publishing.
    24. Lars Osberg, 1998. "Economic Insecurity," Discussion Papers 0088, University of New South Wales, Social Policy Research Centre.
    25. Quah, Danny, 2002. "One Third of the World's Growth and Inequality," CEPR Discussion Papers 3316, C.E.P.R. Discussion Papers.
    26. Danny Quah, 2002. "One third of the world's growth and inequality," LSE Research Online Documents on Economics 2019, London School of Economics and Political Science, LSE Library.
    27. Danny Quah, 2002. "One Third of the Worlds Growth and Inequality," CEP Discussion Papers dp0535, Centre for Economic Performance, LSE.
    28. Roman Arjona & Maxime Ladaique & Mark Pearson, 2001. "Growth, Inequality and Social Protection," OECD Labour Market and Social Policy Occasional Papers 51, OECD Publishing.
    29. Hongyi Li & Lyn Squire & Tao Zhang & Heng-fu Zou, 1999. "A Data Set on Income Distribution," CEMA Working Papers 575, China Economics and Management Academy, Central University of Finance and Economics.
    30. Miguel Székely & Marianne Hilgert, 1999. "What's Behind the Inequality we Measure: An Investigation Using Latin American Data," Research Department Publications 4188, Inter-American Development Bank, Research Department.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as in new window

    Cited by:
    1. Gustafsson, Bjorn & Nivorozhkina, Ludmila, 2005. "How and why transition made income inequality increase in urban Russia: A local study," Journal of Comparative Economics, Elsevier, vol. 33(4), pages 772-787, December.
    2. Agell, Jonas, 2003. "Efficiency and Equality in the Labour Market," Research Papers in Economics 2003:11, Stockholm University, Department of Economics.
    3. Van Ourti, Tom & van Doorslaer, Eddy & Koolman, Xander, 2009. "The effect of income growth and inequality on health inequality: Theory and empirical evidence from the European Panel," Journal of Health Economics, Elsevier, vol. 28(3), pages 525-539, May.

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:max:cprwps:48. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Kelly Bogart) or (Katrina Wingle).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.