Inequality and Economic Growth: A Global View Based on Measures of Pay

This paper discusses two issues in the relationship betweeninequality and economic growth: the data and the econometrics.We first review the income inequality data set of Deiningerand Squire (D&S), which, we argue, fails to provide eitheradequate or accurate coverage, whether through time or acrosscountries. We then introduce our own measures of the inequalityof manufacturing pay, based on UNIDO's Industrial Statistics.These provide indicators of pay inequality that are more stable,more reliable and in our view also more comparable across countries,than the D&S data. Turning to the fabled "Kuznets" relationship between inequalityand economic development, we diagnose several common econometricproblems in the literature, including measurement error andomitted variable bias. By taking steps to account for theseproblems, and by introducing a more complete panel data setbased on pay inequalities, we seek more reliable inferencesconcerning the relationship between inequality, national incomeand economic growth. We find evidence that generally supportsKuznets' specification for industrializing countries: pay inequalitytends to decline as per capita income increases, though withsome tendency for the relationship to curve up for the richestcountries. After 1981 two findings emerge. First, per capitaGDP growth slowed dramatically in most countries, increasinginequality along the augmented Kuznets curve. Second, thereis a global and macroeconomic effect that produces rising inequalityin our data, independent of GDP or its changes. The timing ofthis effect suggests a link to the high real interest ratesand global debt crisis of the period beginning in 1982. (JELC23, D31, J31, O11)     

Inequality Beyond GDP: A Long View

This paper addresses international inequality in multidimensional well-being during the last one-and-a-half centuries. Inequality fell in health and education since the late 1920s, due to the globalization of mass schooling and the diffusion of the health transition, but only dropped in population-weighted terms from 1970 onward for political and civil liberties, as the emergence of authoritarian regimes increased its dispersion since the end of World War I. In terms of augmented human development inequality declined since 1900. These results are at odds with per capita income inequality that rose over time and only shrank from 1990 onward. The gap between the OECD and the Rest of the world accounted only partially for inequality in well-being since the dispersion within developing regions became its main driver from the mid-20th century onward. Countries in the middle and lower deciles of the world distribution achieved the largest relative gain over the past century.     

Decomposing Global Inequality

This paper provides an intuitive additive decomposition of the global income Gini coefficient with respect to differences within and between countries. In 2005, nearly half the total global income inequality is due to income differences between Europeans and North Americans on the one side and inhabitants of Asia on the other, with the China‐USA income differences alone accounting for six percent of global inequality. Historically, income differences between Asia and Europe have driven a large part of global inequality, but the quantitative importance of within‐Asia income inequality has increased substantially since 1950.     

税收负担、产业升级及影响探究:一个国际视野

税负问题一直为众多学者所关注,对产业升级影响如何,需要深入探究。通过对九十个国家的相关数据进行分析和检验,结果表明,世界宏观税负水平基本保持稳定,微观税负总体呈现小幅下降态势,税负与经济发展水平呈现反向变动关系,产业升级与经济发展水平密切相关,与税负呈现反向变动关系,即产业升级的同时税负也会下降,降低税负有利于促进产业升级,这种影响在不同经济发展水平国家之间表现尤为明显。我国应以营改增为契机,利用税收政策促进产业升级,逐步降低流转税比重,减少企业或产业转型升级的税收障碍,加大促进企业科技创新税收优惠政策力度,并进行规范管理。     

城市化、产业结构变动与城乡收入差距——以湖北省为例

从城市化、产业结构变动与城乡收入差距的相互影响的机理出发,基于湖北省1978～2011年的时间序列数据,本文对这三者进行了动态计量分析。研究表明,城市化水平和产业结构变动是影响湖北省城乡收入差距的主要因素,城市化和第二产业变动对城乡收入差距的扩大都具有长期的正的冲击效应;但城乡收入差距对城市化和产业结构变动没有明显的冲击效应,城市化推进了产业结构的调整变化,但产业结构的变动对城市化的冲击效应并不明显。     

Growth, Inequality, and Well-Being: Intertemporal and Global Comparisons

We use several well-being measures that combine average incomewith a measure of inequality to undertake intertemporal andglobal comparisons of wellbeing. The conclusions emerging fromthe intertemporal analysis are that the impact of these measureson temporal trends in well-being is relatively small on average,but changing across the decades. In particular, it suggeststhat changes in well-being were understated in the 1960s and1970s and overstated in the 1980s and 1990s. Our global analysiscovering ca. 81 per cent of the world's population demonstratesthat global well-being is at least 50 per cent smaller thanworld per capita income if the unequal income distribution isalso factored in. Conversely, growth in world well-being hasbeen larger than world income growth between 1970–1998.Since the inclusion of inequality has an important impact onwell-being comparisons, it is of great importance to generatemore consistent and intertemporally as well as internationallycomparable data on inequality. (JEL I31, D63)     

Industrial Location and Spatial Inequality: Theory and Evidence from India

The authors argue that spatial inequality of industry location is a primary cause of spatial income inequality in developing nations. Their study focuses on understanding the process of spatial industrial variation: identifying the spatial factors that have cost implications for firms, and the factors that influence the location decisions of new industrial units. The analysis has two parts. First the authors examine the contribution of economic geography factors to the cost structure of firms in eight industry sectors and show that local industrial diversity is the one factor with significant and substantial cost‐reducing effects. They then show that new private sector industrial investments in India are biased toward existing industrial and coastal districts, whereas state industrial investments (in deep decline after structural reforms) are far less biased toward such districts. The authors conclude that structural reforms lead to increased spatial inequality in industrialization, and therefore, income.     

Poor Results and Poorer Policy: A Comparative Analysis of Estimates of Global Inequality and Poverty

This paper examines the data and methods used to estimate worldinequality and world poverty since 1950. It was found that regardlessof method used, world inequality reversed a more than a centuryold trend during the globalization period, loosely defined asthe post 1980 years. Consumption growth of the poor also acceleratedduring globalization, and such growth was in excess of thatof the average person. Poverty declined at close to 1.5 percentagepoints a year, a statistic not affected much by use of differentPPP data, or use of different methods, including the methodadopted by the official "keeper" of world poverty statistics,the World Bank. Indeed, a striking result obtained is that worldpoverty, according to the World Bank method, data, and definitions,was close to 15 percent in 2002, a level that is meant to bethe millennium development goal target for 2015. (JEL O15, O20,O47,O5)     

Global Innovation Races,Offshoring and Wage Inequality

In the 1970s and 1980s the US position as the global technological leader was increasingly challenged by Japan and Europe. In those years the US skill premium and residual wage inequality increased substantially. This paper presents a two‐region, quality‐ladder growth model where the lagging economy progressively catches up with the leader. As the innovation gap closes, the advanced country experiences fiercer foreign technological competition that forces its firms to innovate more. Faster technical change increases the skill premium and residual inequality. Offshoring production and innovation plays a key role in shaping the link between international competition and inequality.     

Financial Development and Inequality in the Global Economy

We build a heterogeneous firms model with firm‐specific wages and credit frictions to study the role of financial development for inequality in the global economy. If there are many small (non‐exporting) firms, better access to external funds reduces wage and profit inequality as well as unemployment. In contrast, if there are many large (exporting) firms, financial development might have opposite effects – especially if trade costs are low. In summary, the implications of financial development for inequality depend on the size distribution of firms and on the costs of exporting. Trade liberalization, however, raises inequality unambiguously.     

Inequality and Income Distribution in Global Value Chains

Global value chains (GVCs), led by transnational corporations (TNCs), have reshaped the world division of labor over the past two decades. GVCs are pervasive in low technology manufacturing, such as textile and apparel, as well as in more advanced industries like automobiles, electronics, and machines. This hierarchical division of labor generates wild competition at the lower value-added stages of production, where low wages and low profit margins prevail for workers and contract manufacturers in developing countries. At the top of the hierarchy another kind of competition prevails, centered on the ability to monitor and control intellectual property rights related to innovation, finance, and marketing. We argue that GVCs have had crucial effects on income inequality and the appropriation of rents in modern capitalism.     

International Outsourcing, Technological Change, and Wage Inequality

This paper analyzes the impact of international outsourcing on UK wage inequality during the 1990s by applying the mandated wage approach proposed by Feenstra and Hanson (1999 ). The methodology is extended in order to obtain additional insight into the relative importance of the factor and sector bias of international outsourcing and technological change. The results indicate that technological change is the predominant force behind the increase in wage inequality, but international outsourcing also contributed significantly. In explaining the increase in wage inequality the factor bias of technological change was slightly larger than its sector bias, while for international outsourcing the sector bias was much more important. The relative importance of the two effects hinges crucially on the estimated rate of productivity passthrough.     

全球产业链、区域工资差异与产业升级——对长三角和珠三角产业发展模式的一个比较研究

本文从全球产业链视角,对珠三角和长三角目前发展的差异做了理论分析。研究发现,后发国家或地区在产业链中的位置决定了其相应的工资水平。在工资内生决定的情况下,任何干预工资的外部行为并不能促使其产业升级。研究还发现,后发国家或地区的产业升级具有"囚徒困境"的性质,跨国公司的进入一方面有可能促使其摆脱困境进而升级,另一方面也有可能使其陷入低水平发展陷阱中不能自拔。当后者发生的时候,政府对于企业技术创新或新技术引进的鼓励和补贴有助于本土企业摆脱低水平发展的情形。以上分析同时也指出了珠三角产业升级的重点。     

科学发展观与产业政策选择

为了追求经济增长而设立的非均衡产业结构安排,虽然带来了较快的经济增长速度,但却损失了劳动力资源的合理配置,损失了应当与经济增长相伴随的就业岗位,也剥夺了一些人的公平发展机会。科学发展观的内涵是追求以人为本、机会公平和整个社会的可持续发展。新时期的产业结构调整政策的制定,应当充分体现科学发展观的内在要求,在注重发展高科技产业的同时,发展具有比较优势的劳动密集型产业、循环经济、节能、少污染产业。     

The Evolution of Industrial Earnings Inequality in Mexico and Brazil

Industrial data are used to derive estimates of the pattern of change in wage inequality in Mexico and Brazil. Using the group decomposition of Theil's T -statistic, the paper presents monthly changes in the dispersion of industrial wages for Brazil (1976 through 1995) and for Mexico (1968 through 1998). Both countries show increases in wage dispersion over time, and a strong negative correlation is found with the rate of real economic growth. Other things equal, the later Brazilian heterodox stabilization plans seem to have reduced inequality in the short run.