Distributional Consequences of Economic Globalization

University Of California-Riverside, Riverside CA

Investigators

Abstract

SES-1528703 Matthew Mahutga University of California-Riverside The causes of rising income inequality in advanced capitalist countries are not well understood by social scientists despite more than two decades of dedicated research. This project synthesizes literatures on the two most common researched causes of the increase in inequality: globalization and institutions. It advances both of these literatures by providing an explanation for the paradoxical findings on the distributional effects of economic globalization. This explanation identifies specific mechanisms by which globalization and national institutions interact to produce distinct distributional outcomes across time and space. This study subjects the arguments to empirical scrutiny, a multilevel analysis of the Luxembourg Income Study's (LIS) individual wage data will be conducted. The bulk of NSF funds will support the harmonization of country-specific occupational categories in order to measure skill and work-place authority more directly than is currently possible, because both of these factors are the key mechanisms by which production globalization should affect inequality. In addition to advancing basic research on the causes of rising income inequality among advanced industrial democracies, this project will provide evidence-based assessments of the future implications of production globalization for income inequality, and of policy options at both the macro and micro levels. In tandem, these can help to ameliorate the impact of production globalization on income inequality, low-skill labor, and labor more generally, in the coming decades.