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Globalization and social segmentation

Author

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  • Nathalie Chusseau

    (EQUIPPE, University of Lille 1, France)

  • Joel Hellier

    (EQUIPPE, University of Lille 1 and LEMNA, University of Nantes, France)

Abstract

To analyse the impacts of North-South globalization (NSG) and North-North globalization (NNG) upon social segmentation in advanced economies, we build a model in which (i) households differ in their skill and capital endowments, and (ii) there is a minimal consumption under which they are excluded from the labour market. NSG changes income distribution in favour of skilled labour and capital and NNG generates tax competition. The model endogenously generates four types of households: the excluded, the rentiers, the ‘classical’ (whose working time increases with real wages) and the ‘non-classical’ (displaying the opposite relationship). Globalization modifies the size of each group. NNG makes the groups of rentiers and excluded to expand whereas NSG has an inverted-U impact on the dimension of both groups. The simulations performed with plausible values of the parameters and factor payments show that Globalization (NSG+NNG) increases the number of excluded and the number of rentiers.

Suggested Citation

  • Nathalie Chusseau & Joel Hellier, 2014. "Globalization and social segmentation," Working Papers 339, ECINEQ, Society for the Study of Economic Inequality.
    • Handle: RePEc:inq:inqwps:ecineq2014-339
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    Cited by:

    1. Falvey, Rod & Greenaway, David & Silva, Joana, 2010. "Trade liberalisation and human capital adjustment," Journal of International Economics, Elsevier, vol. 81(2), pages 230-239, July.

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    More about this item

    Keywords

    Capital mobility; exclusion; globalization; rentiers; social segmentation; tax competition.;
    All these keywords.

    JEL classification:

    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D33 - Microeconomics - - Distribution - - - Factor Income Distribution
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions

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