Can Social Spending Cushion the Inequality Effect of Globalization?

39 Pages Posted: 17 May 2020

See all articles by Andreas Bergh

Andreas Bergh

Research Institute of Industrial Economics (IFN); Lund University - Department of Economics

Irina Mirkina

Lund University - Department of Economics

Therese Nilsson

Research Institute of Industrial Economics (IFN); Lund University - Department of Economics

Date Written: March 2020

Abstract

This paper examines whether social spending cushions the effect of globalization on within‐country inequality. Using information on disposable and market income inequality and data on overall social spending, and health and education spending from the ILO and the World Bank/WHO, we analyze whether social spending moderates the association between economic globalization and inequality. The results confirm that economic globalization—especially economic flows—associates with higher income inequality, an effect driven by non‐OECD countries. Health spending is strongly associated with lower inequality, but we find no robust evidence that any kind of social spending negatively moderates the association between economic globalization and inequality.

Keywords: globalization, income inequality, social spending

Suggested Citation

Bergh, Andreas and Mirkina, Irina and Nilsson, Therese, Can Social Spending Cushion the Inequality Effect of Globalization? (March 2020). Economics & Politics, Vol. 32, Issue 1, pp. 104-142, 2020, Available at SSRN: https://ssrn.com/abstract=3598400 or http://dx.doi.org/10.1111/ecpo.12143

Andreas Bergh (Contact Author)

Research Institute of Industrial Economics (IFN) ( email )

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Lund University - Department of Economics ( email )

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Lund
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HOME PAGE: http://www.nek.lu.se/

Irina Mirkina

Lund University - Department of Economics ( email )

P.O. Box 7082
S-220 07 Lund
Sweden

Therese Nilsson

Research Institute of Industrial Economics (IFN) ( email )

Box 55665
Grevgatan 34, 2nd floor
Stockholm, SE-102 15
Sweden

Lund University - Department of Economics ( email )

P.O. Box 7082
S-220 07 Lund
Sweden
+46 46 222 46 43 (Phone)

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