Globalisation, Inequality and Redistribution: Theory and Evidence

48 Pages Posted: 7 Dec 2017

See all articles by Giray Gozgor

Giray Gozgor

Istanbul Medeniyet University

Priya Ranjan

University of California, Irvine - Department of Economics

Date Written: December 2017

Abstract

This paper constructs a simple theoretical model to study the implications of globalisation for inequality and redistribution. It shows that when globalisation increases inequality, a policymaker interested in maximising the sum of welfares of all agents increases redistribution. Empirically, the paper examines the effects of globalisation on inequality and redistribution in a panel data set of 140 countries for the period from 1970 to 2012. It finds that both inequality and redistribution have been increasing with globalisation. The results are robust to the inclusion of many different controls and the exclusion of outliers.

Keywords: globalisation, income inequality, redistributive policies

Suggested Citation

Gozgor, Giray and Ranjan, Priya, Globalisation, Inequality and Redistribution: Theory and Evidence (December 2017). The World Economy, Vol. 40, Issue 12, pp. 2704-2751, 2017. Available at SSRN: https://ssrn.com/abstract=3083241 or http://dx.doi.org/10.1111/twec.12518

Giray Gozgor (Contact Author)

Istanbul Medeniyet University ( email )

D-100 Karayolu
Merdivenkoy Mevkii No:6/1 Goztepe/Kadıkoy
Istanbul
Turkey

Priya Ranjan

University of California, Irvine - Department of Economics ( email )

3151 Social Science Plaza
Irvine, CA 92697-5100
United States

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