Income Inequalities and International Trade in Goods and Services: Short- and Long-Run Evidence

Cassette, Aurélie and Fleury, Nicolas and Petit, Sylvain (2012): Income Inequalities and International Trade in Goods and Services: Short- and Long-Run Evidence. Published in: The International Trade Journal , Vol. 26, (2012): pp. 223-253.

Abstract

In this article, we study the short- and long-run effects of trade openness in services on wage inequalities. The sample covers ten Organization for Economic Cooperation and Development (OECD) countries from 1980 to 2005. We find a differentiated impact of trade in goods compared to trade in services: while trade in goods has a short- and a long-run impact on inequalities, trade in services has only long-run effects. Moreover, we also find that international trade in services has a stronger impact on inequalities than international trade in goods, and this effect does not concern only inequalities between top incomes and low incomes but also between top incomes and median incomes.

• Item Type: MPRA Paper
• Language: English
• Keywords: inequality, openness trade, trade of services, Error Correction Model (ECM), cointegrated panel model
• Subjects: C - Mathematical and Quantitative Methods > C2 - Single Equation Models ; Single Variables > C23 - Panel Data Models ; Spatio-temporal Models; D - Microeconomics > D3 - Distribution > D31 - Personal Income, Wealth, and Their Distributions; F - International Economics > F1 - Trade > F10 - General

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