Globalization and Income Distribution: A Specific Factors Continuum Approach / James E. Anderson.

Format:

Book

Author/Creator:

Anderson, James E.

Contributor:

National Bureau of Economic Research.

Series:

Working Paper Series (National Bureau of Economic Research) no. w14643.

NBER working paper series no. w14643

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Globalization and Income Distribution

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2009.

Summary:

Does globalization widen inequality or increase income risk? In the specific factors continuum model of this paper, globalization widens inequality, amplifying the positive (negative) premia for export (import- competing) sectors. Globalization amplifies the risk from idiosyncratic relative productivity shocks but reduces risk from aggregate shocks to absolute advantage, relative endowments and transfers. Aggregate-shock-induced income risk bears most heavily on the poorest specific factors, while non-traded sectors are insulated. Heterogeneous shocks to firms induce Darwinian competition for sector specific factors that is harsher the more productive the sector. Wage bargaining implies within-sector wage dispersion that falls or rises with export intensity depending on the joint distribution of sectoral and firm shocks.

Notes:

Print version record

January 2009.