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Globalization, Poverty, and Inequality since 1980

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  • David Dollar

Abstract

One of the most contentious issues of globalization is the effect of global economic integration on inequality and poverty. This article documents five trends in the modern era of globalization, starting around 1980. The first trend is that growth rates in poor economies have accelerated and are higher than growth rates in rich countries for the first time in modern history. Developing countries' per capita incomes grew more than 3.5 percent a year in the 1990s. Second, the number of extremely poor people in the world has declined significantly--by 375 million people since 1981--for the time in history. The share of people in developing economies living on less than $1 a day has been cut in half since 1981, though the decline in the share living on less than $2 per day was much less dramatic. Third, global inequality has declined modestly, reversing a 200-year trend toward higher inequality. Fourth, within-country inequality in general is not growing, though it has risen in several populous countries (China, India, the United States). Fifth, wage inequality is rising worldwide. This may seem to contradict the fourth trend, but it does not because there is no simple link between wage inequality and household income inequality. Furthermore, the trends toward faster growth and poverty reduction are strongest in developing economies that have integrated with the global economy most rapidly, which supports the view that integration has been a positive force for improving the lives of people in developing areas. Copyright 2005, Oxford University Press.

Suggested Citation

  • David Dollar, 2005. "Globalization, Poverty, and Inequality since 1980," World Bank Research Observer, World Bank Group, vol. 20(2), pages 145-175.
  • Handle: RePEc:oup:wbrobs:v:20:y:2005:i:2:p:145-175
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    Cited by:

    1. 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, pages 62-68.
    2. Sapkota, Jeet Bahadur, 2011. "Impacts of globalization on quality of life: evidence from developing countries," MPRA Paper 37506, University Library of Munich, Germany.
    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, pages 206-213.
    4. Goto, Hideaki, 2008. "Labor Market Competitiveness and Poverty," Working Papers 51159, Cornell University, Department of Applied Economics and Management.
    5. Rassekh, Farhad, 2010. "Is Stolper-Samuelson dangerous and FPE a failure?," International Review of Economics & Finance, Elsevier, pages 555-561.
    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. Chunli Shen & Heng-fu Zou, 2006. "China: Regional Disparities In Poverty Distribution," CEMA Working Papers 252, China Economics and Management Academy, Central University of Finance and Economics.
    8. Jalil, Abdul, 2012. "Modeling income inequality and openness in the framework of Kuznets curve: New evidence from China," Economic Modelling, Elsevier, pages 309-315.
    9. Filipe Campante & David Yanagizawa-Drott, 2016. "Long-range growth: economic development in the global network of air links," UBSCENTER - Working Papers 016, UBS International Center of Economics in Society - Department of Economics - University of Zurich.
    10. Wagle, Udaya R., 2007. "Are Economic Liberalization and Equality Compatible? Evidence from South Asia," World Development, Elsevier, pages 1836-1857.
    11. Robert Lehmann & Antje Weyh, 2016. "Forecasting Employment in Europe: Are Survey Results Helpful?," Journal of Business Cycle Research, Springer;Centre for International Research on Economic Tendency Surveys (CIRET), vol. 12(1), pages 81-117, September.
    12. Rougoor, Ward & van Marrewijk, Charles, 2015. "Demography, Growth, and Global Income Inequality," World Development, Elsevier, pages 220-232.
    13. Doan, Ha Thi Thanh & Wan, Guanghua, 2017. "Globalization and the Labor Share in National Income," ADBI Working Papers 639, Asian Development Bank Institute.
    14. repec:wsi:dltcxx:v:03:y:2008:i:01:n:s0219871108000343 is not listed on IDEAS
    15. Nguyen, Quynh, 2015. "“Mind the Gap”: Inequality Aversion and Mass Support for Protectionism," Papers 838, World Trade Institute.
    16. Getachew, Yoseph Yilma, 2010. "Public capital and distributional dynamics in a two-sector growth model," Journal of Macroeconomics, Elsevier, pages 606-616.
    17. Sumie & Mototsugu Fukushige, 2007. "Globalization and Economic Inequality in the Short and Long Run: The Case of South Korea 1975-1995," Discussion Papers in Economics and Business 07-43, Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP).

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