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Globalization and Inequality: Historical Trends

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Kevin H. O'Rourke

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Abstract

This paper surveys trends in both international economic integration and inequality over the past 150 years, as well as the links between them. In doing so, it distinguishes between (a) the different dimensions of globalization; and (b) between-country and within-country inequality. Theory suggests that globalization will have very different implications for within-country inequality, depending on the dimension of globalization involved (e.g. trade versus factor flows), on the country concerned, and on the distribution of endowments; the historical record provides ample evidence of this ambiguous relationship. Late 19th century globalization had large effects on within-country income distribution, but the effect on inequality differed greatly across countries: both trade and migration (but not capital flows) made the rich New World more unequal, and the (less rich) Old World more equal. The evidence on the links between within-country inequality and globalization in the late 20th century is mixed. The balance of evidence suggests that globalization has been a force for between-country convergence in both the late 19th and late 20th centuries; long run patterns of divergence are due to other factors (e.g. the unequal spread of the Industrial Revolution).

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 8339.

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Date of creation: Jun 2001
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Handle: RePEc:nbr:nberwo:8339

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F0 - International Economics - - General
N7 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services

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Cited by:
(explanations, 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.)

  1. Heshmati, Almas, 2004. "A Review of Decomposition of Income Inequality," IZA Discussion Papers 1221, Institute for the Study of Labor (IZA). [Downloadable!]
  2. Heshmati, Almas, 2004. "Continental and Sub-Continental Income Inequality," IZA Discussion Papers 1271, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  3. Carlo Pietrobelli & Silvia Nenci, 2007. "Does tariff liberalization promote trade? Latin America in the long run (1900-2000)," Working Papers 0704, CREI Università degli Studi Roma Tre, revised 2007. [Downloadable!]
  4. Falkinger, Josef & Grossmann, Volker, 2004. "Institutions and Development: The Interaction between Trade Regime and Political System," IZA Discussion Papers 1242, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  5. Ravallion, Martin, 2004. "Competing concepts of inequality in the globalization debate," Policy Research Working Paper Series 3243, The World Bank. [Downloadable!]
  6. Duasa, Jarita, 2008. "Income convergence of divergence? Study on selected Muslim countries," MPRA Paper 11563, University Library of Munich, Germany. [Downloadable!]
  7. Michael Huberman & Wayne Lewchuk, 2002. "European Economic Integration and the Labour Compact, 1850-1913," CIRANO Working Papers 2002s-34, CIRANO. [Downloadable!]
    Other versions:
  8. Heshmati, Almas, 2004. "The World Distribution of Income and Income Inequality," IZA Discussion Papers 1267, Institute for the Study of Labor (IZA). [Downloadable!]
  9. Denny, Kevin & Harmon, Colm & Lydon, Raemonn, 2002. "Cross Country Evidence on the Returns to Education: Patterns and Explanations," CEPR Discussion Papers 3199, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  10. Tine Stanovnik & Miroslav VerbiC, 2005. "Wage and Income Inequality in Slovenia, 1993--2002," Post-Communist Economies, Taylor and Francis Journals, vol. 17(3), pages 381-397, September. [Downloadable!] (restricted)
    Other versions:
  11. Marcela Anzola, 2006. "Países en desarrollo y globalización: ¿Gandores o Perdedores?," BORRADORES DE INVESTIGACIÓN 003974, UNIVERSIDAD DEL ROSARIO - FACULTAD DE ECONOMÍA. [Downloadable!]
  12. Almas Heshmati, 2007. "A Model for Industrial Development of the Federal Region of Kurdistan: Science and Technology Policy, Instruments and Institutions," IZA Discussion Papers 3213, Institute for the Study of Labor (IZA). [Downloadable!]
  13. Heshmati, Almas, 2005. "The Relationship between Income Inequality, Poverty, and Globalization," Working Papers RP2005/37, World Institute for Development Economic Research (UNU-WIDER). [Downloadable!]
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  14. Roine, Jesper & Vlachos, Jonas & Waldenström, Daniel, 2007. "What Determines Top Income Shares? Evidence from the Twentieth Century," Research Papers in Economics 2007:17, Stockholm University, Department of Economics. [Downloadable!]
    Other versions:
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