Top income shares in OECD countries: The role of government ideology and globalisation

This paper investigates how government ideology and globalisation are associated with top income shares in 17 OECD countries over the period 1970 to 2014. We use top income shares of the World Wealth and Income Database (WID ). Globalisation is measured by the KOF index of globalisation. Static and dynamic panel model results show that the top income shares increased more under right wing governments than under left wing governments. The ideology‐induced effect was stronger when globalisation proceeded more rapidly. Globalisation was positively correlated with income shares of the upper‐middle class (P99–P90), but negatively with income shares of the rich (top 1%) in the overall sample. We show that the relationship differs between Anglo‐Saxon countries and other OECD countries. Globalisation was more pro‐rich in Anglo‐Saxon countries than in other OECD countries. Government ideology does not turn out to have a statistically significant effect on top income shares in Anglo‐Saxon countries after the 1980s, whereas ideology‐induced differences in the distributional outcomes continued in other OECD countries.     

Globalisation and Inter‐occupational Inequality: Empirical Evidence from OECD Countries

How does globalisation affect inter‐occupational wage inequality within countries? This paper examines this by focusing on two dimensions of globalisation: openness to trade and openness to capital flows, using a relatively new data set on occupational wages. Estimates from a dynamic model for 15 OECD countries spanning the period 1983–2003 suggest that increased openness increases occupational wage inequality in poorer OECD countries as predicted by the Heckscher–Ohlin–Samuelson model, but for the more advanced OECD countries, we find no significant effect. The absence of the expected result for the latter category can be due to a rapid increase in the supply of skilled labour, to outsourcing of skilled jobs or because changes in the trade flows are too small to have any significant effect in those countries.     

Exchange Rate Volatility and Exports: New Empirical Evidence from the Emerging East Asian Economies

This paper examines the impact of bilateral real exchange rate volatility on real exports of five emerging East Asian countries among themselves as well as to 13 industrialised countries. We recognise the specificity of the exports between the emerging East Asian and industrialised countries and employ a generalised gravity model. In the empirical analysis we use a panel comprising 25 years of quarterly data and perform unit‐root and cointegration tests to verify the long‐run relationship among the variables. The results provide strong evidence that exchange rate volatility has a negative impact on the exports of emerging East Asian countries. In addition, the results suggest that the pattern of bilateral exports is influenced by third‐country variables. An increase in the price competitiveness of other emerging East Asian countries has a negative impact on a country’s exports to a destination market, but the magnitude of the impact is relatively small. These results are robust across different estimation techniques and do not depend on the variable chosen to proxy exchange rate uncertainty. The results of the GMM‐IV estimation also confirm the negative impact of exchange rate volatility on exports and suggest that this negative relationship is not driven by simultaneous causality bias.     

中国社会福利体系适度性研究——国际比较与实证分析

社会福利体系是影响经济可持续发展和社会安定的重要因素。政府在社会福利体系中起主导作用,但存在福利支出的适度性问题,福利过度或不足均不利于经济社会发展。本文对中国与OECD的社会福利体系做了比较,并选取美国等OECD七国和中国1980-2007年的数据作为样本开展实证分析。研究发现:(1)结合发达国家的经验,现阶段我国的社会福利总支出、养老保险支出和健康福利支出偏低;(2)但收入维持支出(即最低生活保障支出)却超前于经济发展水平和政府财力;(3)失业福利支出是否适度,不同分析方法得出了不同结论,有待进一步分析。     

The Evidence on Globalisation

Globalisation is blamed for many socioeconomic shortcomings. I discuss the consequences of globalisation by surveying the empirical globalisation literature. My focus is on the KOF indices of globalisation that have been used in more than 100 studies. Early studies using the KOF index reported correlations between globalisation and several outcome variables. Studies published more recently identify causal effects. The evidence shows that globalisation has spurred economic growth, promoted gender equality and improved human rights. Moreover, globalisation did not erode welfare state activities, did not have any significant effect on labour market interaction and hardly influenced market deregulation. It increased, however, within‐country income inequality. The consequences of globalisation thus turn out to be overall much more favourable than often conjectured in the public discourse.     

Public debt and social expenditure: Friends or foes?

This paper assesses the effects of total public debt on social expenditure using an unbalanced panel of 50 countries between 1985 and 2003. The most robust finding is that higher debt ratios reduce social expenditures. Loans from multilateral organizations do not seem to ameliorate the adverse consequences of debt. Results indicate that defaults may have a direct positive effect on social expenditures. The main policy implication is that to protect social expenditures overindebtedness must be avoided.     

Military Expenditures and Profit Rates: Evidence from OECD Countries

This article provides evidence of the effect of military expenditures on the rate of profits for 24 OECD countries for the period of 1963–2008 by employing a panel autoregressive distributed lag model within a Marxist framework for the first time. Findings show that while for the whole period there is positive linkage between military expenditures and profit rates, in the post‐1980 era the impact of military expenditures is negative. Findings suggest weak evidence that there is positive linkage between military expenditures and profit rates for arms‐exporting countries and negative linkage for non‐arms‐exporting countries.     

Revisiting the nexus between globalisation and the shadow economy: Untying the influences of de jure versus de facto globalisation

This paper examines the relationship between globalisation and the size of the shadow economy, focusing on the differential effects of de jure and de facto globalisation. Using panel data on over 120 countries from 1991 to 2017, the results suggest that globalisation reduces the prevalence of the shadow economy. Furthermore, after differentiating between de jure and de facto globalisation, we find that both de facto and de jure globalisation are effective in curbing the spread of the shadow economy, with de jure globalisation showing a marginally larger impact. However, once we disaggregate the sample into OECD and non-OECD countries, the results show that it is mainly the OECD countries driving this result while the influence of globalisation is statistically insignificant in non-OECD countries. These results withstand a series of robustness analyses and offer important policy implications.     

Did Globalisation Influence Credit Market Deregulation?

We investigate whether globalisation influenced credit market deregulation over the period 1970–2010. Globalisation is measured by the KOF indices of globalisation. Credit market deregulation is measured by the credit market freedom indicators of the Fraser Institute. The results from both cross‐sectional and panel regressions using ordinary least squares indicate a positive correlation between globalisation and credit market deregulation. We account for reverse causality using predicted trade openness as an instrumental variable and show that this approach gives rise to different conclusions. Two‐stage least squares estimations do not show that globalisation had a causal influence on credit market deregulation.     

Globalisation,Institutional Reforms and Financial Development in East Asian Economies

This study investigates the dynamic effects of globalisation on institutions and financial development in East Asian economies using panel data tests. Our empirical results demonstrate that globalisation has a significant influence on institutional quality, and that institutional reforms in turn facilitate and support financial development, in particular the development of the banking sector in East Asia. Globalisation is also found to have a favourable direct impact on stock market development without passing through an institutional quality channel.     

Estimation of income elasticities from Lorenz concentration curves: application to Canadian micro‐data

This study uses a method of estimating income elasticities of major Canadian expenditure groups. The technique is based on the implicit Engel functions derived from the Lorenz curve of permanent income and concentration curves of group‐specific expenditures. The methodology is applied to The 1996 Canadian Family Expenditure Survey. Results indicate that income elasticities for the majority of the broad expenditure categories considered in the study are inelastic and they increase monotonically with income.     

Has Globalisation Affected Collective Bargaining? An Empirical Test, 1980–2009

We investigate whether globalisation has affected the nature of collective bargaining in OECD and emerging countries. The main innovations over the existing empirical literature are (i) the consideration of three distinct aspects of collective bargaining (union density, decentralised bargaining and the extent of government intervention), (ii) the reliance on a sample with a larger cross‐sectional and time dimension (44 countries from 1980 to 2009), and (iii) the application of a more appropriate empirical methodology (dynamic panel data models). We find that globalisation, on average, depresses unionisation but neither affects the degree of decentralisation nor government intervention in collective bargaining. We also uncover significant heterogeneity effects, both across countries and over time.     

Decomposing the Income Insurance Channel across OECD and Emerging Markets

This paper investigates the underlying forces driving income insurance channels for the Organisation for Economic Co‐operation and Development (OECD) and emerging markets. We find income insurance channels across countries to be driven by different subchannels. For the OECD, income insurance is mostly governed by payments for financial liabilities; for the emerging markets, income flows from nationals working abroad constitute the main income smoother. Despite the growth in cross‐border financial asset trading over the years, we could not find evidence of income smoothing via foreign assets receipts for the OECD. For the majority of emerging markets, neither receipts of foreign assets nor foreign liability payments are strong enough to insure income as well.     

The impact of household life‐cycle stages on subjective well‐being: Considering the effect of household expenditures in Hungary

The household life‐cycle stage is a significant contributor to the perception of subjective well‐being; however, the effect of household expenditures of life‐cycles on subjective well‐being has not been thoroughly explored. The life‐course perspective, specifically the study of family/household life‐cycles, emphasizes the understanding of subjective well‐being across the entire life‐span. Accordingly, in the literature subjective well‐being is often studied at different life‐stages considering the influence of variables such as age, cohabitation and fertility. The present study evaluates the level of subjective well‐being across the various life‐cycle stages using a matching method on a Hungarian national sample. This approach is appropriate for studies using observational data because the administration of a true experimental design is usually not feasible for this type of research. The main finding of the article is that controlling for the expenditure structure significantly modifies the effect of life‐cycle on subjective well‐being, which is varied across life‐cycle stages and shown to be highly dependent on household expenditures.     

Rising Income Inequality: Do Not Draw the Obvious Conclusions

Inequality is dominating the political debate in various countries still characterised by sluggish economic recovery and high unemployment. The drivers of higher income inequality since 1995 have been globalisation, technological change and migration. At the same time, these factors have had an undeniably positive impact on aggregate income. While populist parties advocate more nationalistic-oriented approaches, we argue that the appropriate policy response to this dilemma is to alleviate the social costs of globalisation rather than rejecting the aggregate economic benefit.     

Globalisation and Obesity

The WHO has recently announced the global obesity epidemic. An economic model is developed in which globalisation factors generate health externalities and contribute to global obesity growth. The unbalanced panel data set contains the information for 79 countries over the period 1986–2008. Fixed‐effects panel data estimation and quantile regression analysis were used to analyse the data. The fixed‐effects panel model results indicate that the impact of trade openness and the globalisation social index (GSI) on global obesity rates is positive and significant, which is consistent with prior expectations, while surprisingly the foreign direct investments (FDI) has no impact on global obesity. While these results are interesting, they are hiding the effect of globalisation processes across the conditional distribution of the obesity variable. The use of quantile regression uncovered that the impact of the FDI and the GSI on low and average quantiles (low and average obesity rates in our sample) is positive and significant, while high quantiles are not affected. Since low and average quantiles (low and average obesity rates) are representative of the less‐ and medium‐developed countries, this result implies that social globalisation and FDI adversely impact obesity in less‐to‐medium developed countries. Trade openness generally has no impact on changes in obesity rates across quantiles.     

Globalisation and Corruption,Revisited

This paper presents new empirical evidence on the determinants of corruption, focussing on the role of globalisation and inequality. The estimates for a panel of 102 countries over the period 1995–2005 point to three main results: (i) Detection technologies, reflected in a high level of development, human capital and political rights reduce corruption, whereas natural resource rents increase corruption; (ii) Globalisation (in terms of both trade and financial openness) has a negative effect on corruption, which is more pronounced in developing countries; (iii) Inequality increases corruption, and once the role of inequality is accounted for, the impact of globalisation on corruption is halved. In line with recent theory, this suggests that globalisation – besides reducing corruption through enhanced competition – affects corruption also by reducing inequality.     

Globalisation,Women's Economic Rights and Forced Labour

Globalisation critics are concerned that increased trade openness and foreign direct investment exacerbate existing economic disadvantages of women and foster conditions for forced labour. Defenders of globalisation argue instead that as countries become more open and competition intensifies, discrimination against any group, including women, becomes more difficult to sustain and is therefore likely to recede. The same is argued with respect to forced labour. This article puts these competing claims to an empirical test. We find that countries that are more open to trade provide better economic rights to women and have a lower incidence of forced labour. This effect holds in a global sample as well as in a developing country sub‐sample and holds also when potential feedback effects are controlled via instrumental variable regression. The extent of an economy's ‘penetration’ by foreign direct investment by and large has no statistically significant impact. Globalisation might weaken the general bargaining position of labour such that outcome‐related labour standards might suffer. However, being more open toward trade is likely to promote rather than hinder the realisation of two labour rights considered as core or fundamental by the International Labour Organisation, namely the elimination of economic discrimination and of forced labour.     

Effects of the preference for environmental quality on the export competition between China and OECD countries

This study examines how importers’ preferences for environmentally friendly products influence the effect of China’s export growth on the exports of OECD countries to third markets. The effect of China’s export growth is systematically investigated using the theoretical gravity model, which assumes that importers’ environmental preferences are heterogeneous among countries. A new measure is also proposed to represent importers’ revealed preferences for environmental quality across countries. Panel data consisting of observations for 30 OECD exporting countries and 60 importing countries over the 2000–10 period confirm that the crowding‐out effect of China’s export growth on the exports of OECD countries observed in markets for consumption goods and the dampening effect observed in markets for intermediate goods are becoming weaker as the importer preference for environmental quality becomes stronger.     

中国城镇社会保险发展非均衡及影响因素研究

采用基尼系数、泰尔指数测算中国城镇社会保险发展非均衡程度并对其分解,构建动态面板数据模型,分析城镇社会保险非均衡影响因素,实证检验各因素影响效果及显著性水平。研究结果表明：中国城镇社会保险发展呈由东向西依次递减态势;中国城镇社会保险基金收入和支出非均衡程度呈先下降后上升趋势,支出大于收入的非均衡程度;各社会保险项目对非均衡程度影响不同;区域内部非均衡程度大于区域之间,基金支出大于基金收入的区域内对非均衡程度贡献率,东部地区大于中西部地区内部非均衡程度;循环累积效应、经济发展水平、教育、工资水平及地方财政对城镇社会保险支出和收入均具有正向作用。