Analysing Globalisation and Different Measures of Income Inequality

• Autor(a) principal: Lindeza, Tiago Manuel Patrício
• Data de Publicação: 2020
• Tipo de documento: Dissertação
• Idioma: eng
• Título da fonte: Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
• Texto Completo: http://hdl.handle.net/10400.6/10875
• topic: Ardl; Desigualdade de Rendimentos; Globalização; Rácio 20/20; Rácio Palma; Domínio/Área Científica::Ciências Sociais::Economia e Gestão

Inequality is a complex concept that is associated with lower economic growth. The Gini coefficient has been extensively applied as a standard measure of income inequality. Therefore, there is a need to assess the appropriateness of alternative measures. This study applies the 20/20 ratio and Palma ratio as alternatives to the Gini Coefficient. The trade openness variable as a globalisation proxy is assessed. The present study applies CO2 emissions, consumer price index and education variables as control variables. A panel data of 28 countries from the Organization for Economic Co-operation and Development was analysed using annual data for the period from 1993 to 2014. Three models were estimated, and the ARDL approach was used to capture the short- and longrun effects. The Driscoll-Kraay estimator was used to attain robust results, given the presence of the phenomena of heteroscedasticity, contemporaneous correlation, firstorder autocorrelation and cross-sectional dependence. Results suggest that globalisation has increased income inequality, while CO2 emissions and consumer price index have impacted income inequality negatively, i.e., promote income equality. This finding should be incorporated into the definition of inequality strategies, specifically by making globalisation compatible with income inequality mitigation.