The impact of globalization on income distribution: the Korean experience

Mah, Jai S.

doi:10.1080/13504850210149124

Cited by 54 publications

(39 citation statements)

References 9 publications

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“…Some evidence from the developing world is also consistent with the idea that trade openness can lead to more income inequality, despite the opposite SST prediction (Litwin, 1998;Flemming and Micklewright, 2000;Ros and Bouillon, 2002;Mah, 2002). An approach to explain this relationship is the idea that greater competition leads to a reduction of producer rents in the traded sector; to the extent that these rents are shared with workers, wages will decline post-liberalisation.…”

Section: Introductionsupporting

confidence: 61%

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Ángeles-Castro¹

2017

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RESUMENDespués de 1984 y posterior a la liberalización económica, la desigualdad del ingreso en México se incrementó. Algunos de los principales factores que contribuyeron a esta tendencia son, el crecimiento relativo del ingreso promedio en el sector servicios, en relación con los sectores agrícola y manufacturero, lo cual es consistente con argumentos tales como la expansión de los servicios y la reducción de rentas en el sector comercial; el incremento en la tasa de retorno a la educación, que es consistente con la hipótesis del comercio como detonante de la demanda de la mano de obra calificada; y, la estabilización de la tasa de sindicalismo. Por otra * An earlier version of this paper was presented at the Summer School "Inequality, Poverty parte, entre 1998 y 2002, la desigualdad disminuyó gradualmente. Algunos de los factores que propiciaron esta caída son, el decremento de la tasa de retorno a la educación, la caída de la tasa de retorno al sindicalismo y la estabilización de la tasa de sindicalismo. Esta tendencia es consistente con argumentos que sugieren efectos adversos temporales y ciclos en la evolución de la desigualdad del ingreso en el largo plazo. La recomposición de los hogares y los ingresos por transferencias son factores que mitigan la desigualdad, mientras que el deterioro del sector agrícola es una causa persistente de la dispersión del ingreso. Palabras clave: Desigualdad del ingreso, liberalización económica Clasificación JEL: C10, F14, J01, O15ABSTRACT After 1984 and following economic liberalisation, income inequality in Mexico increased. Some of the main factors that contributed to this trend are the relative expansion of the average income in the service sector in relation to the agricultural and manufacturing sectors, which is consistent with arguments such as the rise of services and the reduction of rents in the traded sector, the increase in skill premium, which is in keeping with the skill enhancing trade hypothesis, and the fall in unionisation rates. On the other hand, between 1998 and 2002, inequality fell gradually and some of the factors driving this trend are the decrease in returns to skill and union premium, and the stabilisation of unionisation rates. This trend is consistent with arguments suggesting temporary adverse effects and cycles i n the evolution of income inequality over the longer-run. Households re-composition and transfer income are factors that mitigate inequality, whereas deterioration of the agricultural sector is a persistent sources of income dispersion.

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Section: Introductionsupporting

confidence: 61%

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Ángeles-Castro¹

2017

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“…Many studies estimating the relationship between fdi and income inequality have found it to be positive (Tsai, 1995;Velde, 2003;Choi, 2006;Basu and Guariglia, 2007;Herzer, Hühne and Nunnenkamp, 2012), while others have found it to be negative, or have been unable to find any relationship (Milanovic, 2003;Sylwester, 2005). At the microeconomic level, however, a large branch of the literature has found that when fdi is present, the wage gap between skilled and unskilled workers increases, as therefore does income inequality (Lipsey and Sjöholm, 2004;Mah, 2002;Velde, 2003;Aitken, Harrison and Lipsey, 1996;Feenstra and Hanson, 1997). Consequently, while there is no consensus, the empirical evidence does seem to point to income inequality being increased by fdi flows.…”

mentioning

confidence: 96%

“…Furthermore, a number of country studies support the hypothesis that fdi is associated with greater inequality in wage earnings, especially in developing economies. Some examples are Indonesia (Lipsey and Sjöholm, 2004), the Republic of Korea (Mah, 2002) and Mexico (Aitken, Harrison and Lipsey, 1996;Feenstra and Hanson, 1997), although it should be stressed that much of the empirical evidence also shows fdi to be associated with higher wages for workers of all kinds (Overseas Development Institute, 2002).…”

Section: Foreign Direct Investment (Fdi) and Income Inequalitymentioning

confidence: 99%

Foreign direct investment and income inequality in Latin America: A sectoral analysis

Suanes¹

2016

CEPAL Review

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This paper analyses the relationship between foreign direct investment (fdi) and income inequality in Latin America. In particular, it estimates the effect of fdi from a sectoral perspective, identifying three major sectors: the primary sector, manufacturing industry and services. Using a data panel for 13 economies in the 1980-2009 period, empirical evidence was found for a positive effect of fdi on income inequality in the service and manufacturing sectors. KEYWORDSForeign direct investment, equality, income, Latin America JEL CLASSIFICATION O1, F23AUTHOR Macarena Suanes is a doctoral candidate at

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“…Mah (2002) reports, for instance, a deteriorating effect of FDI inflows on the Gini-coefficients, which were used as a proxy for measuring income inequality in a case study on Korea. This finding is supported by Zhang and Zhang (2003) for China, where foreign trade and FDI has reportedly increased regional inequality.…”

Section: Foreign Direct Investment (Fdi)-income Inequalitymentioning

confidence: 99%

Finance and income inequality in Kazakhstan: evidence since transition with policy suggestions

2017

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Kazakhstan gained independence in 1990 and has undergone significant changes in economic, social and trade conditions since then. We analyse the effects of financial development on income inequality in Kazakhstan, incorporating economic growth, foreign investment, education and the role of democracy as the drivers. We establish that income inequality in Kazakhstan is impaired by financial development. In summary, we send the three messages for policy purposes. First, strengthening financial sector is necessary to close the gap between 'haves and have-nots'. Second, attracting foreign direct investment beyond the hydrocarbon sector is necessary to alleviate inequality. Finally, adaptation of education system to the new social and economic environment would help in improving income distribution.

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The impact of globalization on income distribution: the Korean experience

Cited by 54 publications

References 9 publications

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Foreign direct investment and income inequality in Latin America: A sectoral analysis

Finance and income inequality in Kazakhstan: evidence since transition with policy suggestions

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