There is no shortage of theories that purport to explain why globalization may have adverse, insignificant, or even beneficial effects on income and earnings inequality. Surprisingly, the empirical realities remain an almost complete mystery. In this paper, we use data on industrial wage inequality, household income inequality as well as measures of the economic, social and political dimensions of globalization to examine this controversial issue. Overall, while we find that globalization has exacerbated inequality; this is particularly true in the case of income inequality in OECD countries. Copyright � 2008 The Authors. Journal compilation � 2008 Blackwell Publishing Ltd.
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AbstractFor a number of OECD countries, the deterioration of labour market outcomes for less-skilled workers since the early 1980's has coincided with a steady decline in union membership. Globalisation is commonly believed to have contributed to both developments. However, recent studies fail to find support for the presumption that globalisation adversely affects unions. Revisiting this issue by using a novel globalisation index we find that globalisation has indeed contributed to deunionisation. In delving further into the issue, we find that it is social integration, rather than economic or political integration, that has been the main contributor to the decline in union membership.
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