The rise of income inequality in OECD countries: is globalization one of the causes?-Reference-Cited by-同舟云学术

The rise of income inequality in OECD countries: is globalization one of the causes?

Published:2023-06-01 Issue: Volume: Page:
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Author:

Cívico Juan Carlos Palacios¹,Kern Andreas²,Gorjón Lucía³

Affiliation:

1. University of Barcelona

2. Georgetown University

3. iseak

Abstract

Abstract The current work aims to contrast the impact of globalization on income inequality in OECD countries through the estimation of a Panel Vector Autoregression Model (PVAR). This methodology allows to explain both the direct and indirect mechanisms whereby globalization could increase income inequality, as well as their duration. The results point out that besides the direct and positive impact of globalization on income inequality, there is an indirect or second-round impact coming from the effect of globalization on the compensatory institutions which traditionally contributed to build more egalitarian societies. As suggested by Rodrik (1998), however, the analysis does not appear to confirm the race to the bottom hypothesis by identifying a positive correlation between globalization and the redistributive capacity of states.

Publisher

Research Square Platform LLC

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