Author(s): Mergulhão, Alexandre Prazeres
Date: 2017
Persistent ID: http://hdl.handle.net/10362/26845
Origin: Repositório Institucional da UNL
Subject(s): Income inequality; Inequality extraction ratio; Augmented kuznet´s curve; Country fixed effects; Difference-in-differences; Domínio/Área Científica::Ciências Sociais::Economia e Gestão
This paper analyses the main drivers of global income inequality while testing some of the most relevant economic theories on inequality evolution. We run xed e ects regressions on four di erent income inequality measures, using a panel of 157 countries, for the period 1960-2015. We nd evidence that, while labor market reforms and unemployment were two upturning drivers of inequality, governments have an important rebalancing role, despite their decreased size. Furthermore, al- though social and political globalization reduced inequality, overall globalization and the widening of nancial systems increased inequality. These ndings suggest that the 1980s transition from post-war regulated capitalism to neoliberal capitalism led to a worldwide upsurge of inequality within countries. The e ect of liberalization on inequality is con rmed when we perform a causal analysis using the European Eastern Bloc transition of the 1990s as a quasi-experiment.
