Globalization and Income Inequality: Comparative Analysis of the European Countries

Abstract

Research background: The globalization of the European countries within the EU and the Eurozone is primarily economic and is expressed by the free trade and the movement of capital and labour, which determines the incomes and the GDP. Globalization and its impact on inequality is becoming an essential and problematic issue, especially in the context of on-going economic integration processes between the countries in Europe, which seek to converge their economic, social and political systems in the Euro area. The process of inequality has become even more relevant in the context of globalization. Purpose of the article: The paper aims to examine the impact of globalization on the inequality in the developed and the emerging economies in Europe. Methods: On the basis of an econometric assessment, a comparative analysis of the effect of globalization on the inequality in the developed European countries and the emerging countries is carried out. Findings & Value added: The paper analyses the essential aspects and the effects of the income inequality dynamics, both horizontally and vertically. It also addresses the question of whether the effect of globalization on the economic growth and the inequality is the same for the developing and the developed countries, respectively. Based on the research, seven important conclusions are reached.

The Dynamics of Economic Globalization and Income Inequality in Sub-Saharan African Countries: An Empirical Insight from Two Stage Least Square and Fixed Effect Approach

“…Moreover, [38] argues that the driving force to income convergence through countries is economic globalization. [8] using developed and emerging economies in Europe finds that globalization has no effect on income inequality. For in-depth analysis in this study, the literature will be examined under separate headings.…”

“…In some countries where the population is managed and control by a specific group, income inequality may worsen due to rising economic globalization [1,[4][5][6][7]. However, other scholars believe economic globalization reduces income inequality [8,9]. Hence, the link between economic globalization and income inequality is not robust across studies [1].…”