By Giovanni Andrea Cornia
According to an in depth overview of correct literature and an econometric research of inequality indexes, this quantity presents the 1st systematic research of the adjustments in within-country source of revenue inequality during the last two decades. specifically, it exhibits that inequality worsened in seventy in keeping with cent of the seventy three constructed, constructing, and transitional nations analysed, and evaluates attainable explanations for this frequent upward thrust in source of revenue inequality. The ebook is going directly to supply the 1st empirical overview of the relation among rules in the direction of liberalization and globalization and source of revenue inequality.
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Extra resources for Inequality, Growth, and Poverty in an Era of Liberalization and Globalization (W I D E R Studies in Development Economics)
Similar conclusions are arrived at in Chapter 7 by Taylor who notes that economies that combined growth with stable or declining income inequality adopted a policy mix that avoided the combination of high real exchange rate and domestic interest rate, maintained well-directed export incentives, and could count on a system of capital controls and ﬁnancial regulation able to contain the consequences of capital surges. The impact of capital account liberalization is best understood if seen against the background of domestic ﬁnancial market liberalization introduced in Latin America in the mid-late 1970s, in Africa and Asia in the second half of the 1980s, and in Eastern Europe in the 1990s.
They note also that the earnings gap by education level rose in all industries, not only in those intensively using new technology. In addition, in the 1990s, the average wage of the bottom decile (unskilled workers) improved relative to the median while the latter declined in relation to that of the top decile, suggesting in this way that the cause of rising inequality cannot be due to a fall in unskilled wages. Another weak element in the skill-biased technology hypothesis concerns the scarcity rents supposedly generated by a faster rise in the demand for skilled workers in relation to their supply.
At the global level, it is thus difﬁcult to identify a systemic effect of trade liberalization on inequality due to the heterogeneity of the situations analysed. Similar conclusions are arrived at for Latin America by Behrman et al. (2000), who found no statistically signiﬁcant relation between trade liberalization and wage inequality. In contrast, a recent paper by Milanovic (2002) suggests that trade openness has had a negative impact on inequality in low- and middle-income countries but a favourable one in highincome ones.