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Income Inequalities and International Trade in Goods and Services: Short- and Long-Run Evidence

Author

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  • Cassette, Aurélie
  • Fleury, Nicolas
  • Petit, Sylvain

Abstract

In this article, we study the short- and long-run effects of trade openness in services on wage inequalities. The sample covers ten Organization for Economic Cooperation and Development (OECD) countries from 1980 to 2005. We find a differentiated impact of trade in goods compared to trade in services: while trade in goods has a short- and a long-run impact on inequalities, trade in services has only long-run effects. Moreover, we also find that international trade in services has a stronger impact on inequalities than international trade in goods, and this effect does not concern only inequalities between top incomes and low incomes but also between top incomes and median incomes.

Suggested Citation

  • Cassette, Aurélie & Fleury, Nicolas & Petit, Sylvain, 2012. "Income Inequalities and International Trade in Goods and Services: Short- and Long-Run Evidence," MPRA Paper 75205, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:75205
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    References listed on IDEAS

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    Cited by:

    1. Hajer Kratou & Mohamed Goaied, 2016. "How Can Globalization Affect Income Distribution? Evidence from Developing Countries," The International Trade Journal, Taylor & Francis Journals, vol. 30(2), pages 132-158, March.
    2. Petit, Sylvain, 2016. "International trade in services and inequalities: Empirical evaluation and role of tourism services," MPRA Paper 75206, University Library of Munich, Germany.
    3. Kaitlin Alper & Evelyne Huber & John D. Stephens, 2019. "Work and Poverty in Post-Industrial Democracies," LIS Working papers 763, LIS Cross-National Data Center in Luxembourg.
    4. repec:ers:journl:v:xx:y:2017:i:3a:p:35-50 is not listed on IDEAS
    5. repec:ers:journl:v:xx:y:2017:i:3b:p:27-37 is not listed on IDEAS
    6. Bukhari, Mahnoor & Munir, Kashif, 2016. "Impact of Globalization on Income Inequality in Selected Asian Countries," MPRA Paper 74248, University Library of Munich, Germany.

    More about this item

    Keywords

    inequality; openness trade; trade of services; Error Correction Model (ECM); cointegrated panel model;

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • F10 - International Economics - - Trade - - - General

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