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Globalization, poverty, and inequality since 1980

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  • Dollar, David

Abstract

One of the most contentious issues of globalization is the effect of global economic integration on inequality and poverty. This paper documents five trends in the modern era of globalization, starting around 1980. Trend #1: Poor country growth rates have accelerated and are higher than rich country growth rates - for the first time in modern history. The developing world economy grew at more than 3.5 percent per capita in the 1990s. Trend #2: The number of poor people in the world has declined significantly - by 375 million people since 1981 -- the first such decline in history. The share of the developing world population living on less than $1 per day was cut in half since 1981. Trend #3: Global inequality (among citizens of the world) has declined - modestly -- reversing a 200-year-old trend toward higher inequality. Trend #4: There is no general trend toward higher inequality within countries. Trend #5: Wage inequality is rising worldwide (which may seem to contradict trend #4, but it does not because wages are a small part of household income in developing countries, which make up the bulk of the world in terms of countries and population). Furthermore, the trends toward faster growth and poverty reduction are strongest in the developing countries in which there has been the most rapid integration with the global economy, supporting the view that integration has been a positive force for improving peoples lives in the developing world.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 3333.

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Date of creation: 01 Jun 2004
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Handle: RePEc:wbk:wbrwps:3333

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Keywords: Services&Transfers to Poor; Economic Theory&Research; Economic Conditions and Volatility; Poverty Impact Evaluation; Environmental Economics&Policies; Inequality; Achieving Shared Growth; Governance Indicators; Safety Nets and Transfers; Services&Transfers to Poor;

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References

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  1. Eric Edmonds, 2007. "Child Labor," Working Papers id:988, eSocialSciences.
  2. Dollar, David & Kraay, Aart, 2001. "Growth is good for the poor," Policy Research Working Paper Series 2587, The World Bank.
  3. Dwayne Benjamin & Loren Brandt, 2002. "Agriculture and Income Distribution in Rural Vietnam under Economic Reforms: A Tale of Two Regions," Working Papers benjamin-02-01, University of Toronto, Department of Economics.
  4. George J. Borjas & Richard B. Friedman & Lawrence F. Katz, 1997. "How Much Do Immigration and Trade Affect Labor Market Outcomes?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 28(1), pages 1-90.
  5. Dollar, David & Kraay, Aart, 2003. "Institutions, trade, and growth," Journal of Monetary Economics, Elsevier, vol. 50(1), pages 133-162, January.
  6. N. F. R. Crafts, 2000. "Globalization and Growth in the Twentieth Century," IMF Working Papers 00/44, International Monetary Fund.
  7. Paul M Romer, 1999. "Increasing Returns and Long-Run Growth," Levine's Working Paper Archive 2232, David K. Levine.
  8. Milanovic, Branko, 1999. "True world income distribution, 1988 and 1993 - first calculations, based on household surveys alone," Policy Research Working Paper Series 2244, The World Bank.
  9. Oostendorp, Remco, 2004. "Globalization and the gender wage gap," Policy Research Working Paper Series 3256, The World Bank.
  10. Ritva Reinikka & Paul Collier, 2001. "Uganda's Recovery : The Role of Farms, Firms, and Government," World Bank Publications, The World Bank, number 13850, October.
  11. Dollar, David & Kraay, Aart, 2001. "Trade, growth, and poverty," Policy Research Working Paper Series 2615, The World Bank.
  12. Peter H. Lindert & Jeffrey G. Williamson, 2001. "Does Globalization Make the World More Unequal?," NBER Working Papers 8228, National Bureau of Economic Research, Inc.
  13. Branko milanovic, 2003. "True world income distribution, 1988 and 1993: First calculation based on household surveys alo," HEW 0305002, EconWPA.
  14. Bee Yan Aw & Sukkyun Chung & Mark J. Roberts, 1998. "Productivity and the Decision to Export: Micro Evidence from Taiwan and South Korea," NBER Working Papers 6558, National Bureau of Economic Research, Inc.
  15. John M. Abowd & Richard B. Freeman, 1991. "Immigration, Trade and the Labor Market," NBER Books, National Bureau of Economic Research, Inc, number abow91-1.
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Citations

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Cited by:
  1. Goto, Hideaki, 2008. "Labor Market Competitiveness and Poverty," Working Papers 51159, Cornell University, Department of Applied Economics and Management.
  2. Getachew, Yoseph Yilma, 2010. "Public capital and distributional dynamics in a two-sector growth model," Journal of Macroeconomics, Elsevier, vol. 32(2), pages 606-616, June.
  3. Aylin Koç & Ahmet Yilmaz Ato & Zeynep Çirkin, 2013. "Empirical Investigation on Globalization and Social Polarization: Cross Country Analysis," International Journal of Economics and Financial Issues, Econjournals, vol. 3(1), pages 206-213.
  4. Jalil, Abdul, 2012. "Modeling income inequality and openness in the framework of Kuznets curve: New evidence from China," Economic Modelling, Elsevier, vol. 29(2), pages 309-315.
  5. Christoph Schinke, 2014. "Government Ideology, Globalization, and Top Income Shares in OECD Countries," Ifo Working Paper Series Ifo Working Paper No. 181, Ifo Institute for Economic Research at the University of Munich.
  6. Chani, Muhammad Irfan & Pervaiz, Zahid & Jan, Sajjad Ahmad & Ali, Amjad & Chaudhary, Amatul R., 2011. "Poverty, inflation and economic growth: empirical evidence from Pakistan," MPRA Paper 34290, University Library of Munich, Germany, revised 2011.
  7. Sato, Sumie & Fukushige, Mototsugu, 2009. "Globalization and economic inequality in the short and long run: The case of South Korea 1975-1995," Journal of Asian Economics, Elsevier, vol. 20(1), pages 62-68, January.
  8. Rassekh, Farhad, 2010. "Is Stolper-Samuelson dangerous and FPE a failure?," International Review of Economics & Finance, Elsevier, vol. 19(4), pages 555-561, October.
  9. Sapkota, Jeet Bahadur, 2011. "Impacts of globalization on quality of life: evidence from developing countries," MPRA Paper 37506, University Library of Munich, Germany.
  10. Wagle, Udaya R., 2007. "Are Economic Liberalization and Equality Compatible? Evidence from South Asia," World Development, Elsevier, vol. 35(11), pages 1836-1857, November.

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