Global inequality and national inequality: Is there a trade-off?

Abstract

The objective of this paper is to show that there is a trade-off between global inequality (between countries) and national inequality (within countries). We observed that when the former declines, the latter increases. Empirically, it is possible to observe a shift from higher global inequality to lower global inequality levels (and higher national inequality levels) since the last quarter of the previous century. From a historical perspective, my thesis is that when the main drivers of economic growth are technology and means of transportation, inequality is mostly between countries (higher global inequality). In contrast, when the main driver of economic growth is labour (and related factors such as human capital, skills, knowledge exploitation), then inequality is mostly within countries (higher national inequality). Limitations of data availability did not allow for testing these historical trends. However, the trends of global and national inequalities over the last three to four decades confirm such a thesis.

Labour market flexibilization and income distribution in Europe

“…167-185 human capital and competences; also profit-led and export-led growth). In addition to political processes and behaviours, institutional inertia, changes and social conventions about inequality; macroeconomic policies, labour market institutions and regulations, macroeconomic conditions (mainly, inflation and unemployment rates), redistribution policies, changes in taxation, public spending and social policies, and immigration (Josifidis, Supić, and Emilija Beker Pucar 2017;Kristal and Cohen 2017;Anthony Roberts and Roy Kwon 2017;Manuel Carlos Nogueira and Óscar Afonso 2018;Elena Bárcena-Martín, Natalia Martín-Fuentes, and Salvador Pérez-Moreno 2019;Ennis, Gonzaha, and Pike 2019;Furceri and Ostry 2019;Nolan, Matteo G. Richiardi, and Valenzuela 2019;Natalija Novta and Evgenia Pugacheva 2019;Josifidis, Supić, and Slađana Bodor 2020;Göran Therborn 2020;Tridico 2020).…”