Trade, Education, and Income Inequality

78 Pages Posted: 23 Jun 2020

See all articles by Markus Brueckner

Markus Brueckner

The Australian National University

Ngo Van Long

McGill University - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute)

Joaquin Vespignani

University of Tasmania - School of Economics and Finance

Date Written: 2020

Abstract

This paper examines the relationship between countries' bilateral trade with the United States that is not due to gravity (non-gravity trade) and the distribution of income within countries. In countries where only a small share of the population are educated, an increase in non-gravity trade is associated with a significant increase in income inequality. As education of the population increases the correlation between non-gravity trade and income inequality becomes smaller. Non-gravity trade has no significant effect on income inequality in countries that are world leaders in education.

Keywords: non-gravity trade, inequality, education

JEL Classification: F100, E200

Suggested Citation

Brueckner, Markus and Van Long, Ngo and Vespignani, Joaquin, Trade, Education, and Income Inequality (2020). CESifo Working Paper No. 8370, Available at SSRN: https://ssrn.com/abstract=3633655

Markus Brueckner (Contact Author)

The Australian National University ( email )

Canberra, Australian Capital Territory 2601
Australia

Ngo Van Long

McGill University - Department of Economics ( email )

855 Sherbrooke Street West
Montreal, QC H3A 2T7
Canada
514-398-4850 (Phone)
514-398-4938 (Fax)

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Joaquin Vespignani

University of Tasmania - School of Economics and Finance ( email )

Commerce Building,
Sandy Bay Campus
Sandy Bay, TAS, Tasmania 7005
Australia

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