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The social impact of globalization in the developing countries


  • Eddy LEE


In this paper an ex-post measurable definition of globalization has been used, namely increasing trade openness and FDI. A general result is that the optimistic Heckscher-Ohlin/Stolper-Samuelson predictions do not apply, that is neither employment creation nor the decrease in within-country inequality are automatically assured by increasing trade and FDI. The other main findings of the paper are that: 1) the employment effect can be very diverse in different areas of the world, giving raise to concentration and marginalisation phenomena; 2) increasing trade and FDI do not emerge as the main culprits of increasing within-country income inequality in DCs, although some evidence emerges that import of capital goods may imply an increase in inequality via skill-biased technological change; 3)increasing trade seems to foster economic growth and absolute poverty alleviation, although some important counter-examples emerge.
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Suggested Citation

  • Eddy LEE & Marco VIVARELLI, 2006. "The social impact of globalization in the developing countries," International Labour Review, International Labour Organization, vol. 145(3), pages 167-184, September.
  • Handle: RePEc:bla:intlab:v:145:y:2006:i:3:p:167-184

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    References listed on IDEAS

    1. Basu, Kaushik & Van, Pham Hoang, 1998. "The Economics of Child Labor," American Economic Review, American Economic Association, vol. 88(3), pages 412-427, June.
    2. Peter Jensen & Helena Skyt Nielsen, 1997. "Child labour or school attendance? Evidence from Zambia," Journal of Population Economics, Springer;European Society for Population Economics, vol. 10(4), pages 407-424.
    3. Nielsen, H.S., 1998. "Child Labor and School Attendance: Two Joint Decisions," Papers 98-15, Centre for Labour Market and Social Research, Danmark-.
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    More about this item

    JEL classification:

    • F02 - International Economics - - General - - - International Economic Order and Integration
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development


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