Working Paper No. 1286

Can Social Spending Cushion the Inequality Effect of Globalization?

Published: June 12, 2019Pages: 54Keywords: Globalization; Social spending; Income inequalityJEL-codes: I10

Can Social Spending Cushion the Inequality Effect of Globalization? Andreas Bergh, Irina Mirkina and Therese Nilsson


This paper examines whether social spending cushions the effect of globalization on within-country inequality. Using information on disposable and market income inequality and data on overall social spending, and health and education spending from the ILO and the World Bank/WHO, we analyze whether social spending moderates the association between economic globalization and inequality. The results confirm that economic globalization – especially economic flows – associates with higher income inequality, an effect driven by non-OECD countries. Health spending is strongly associated with lower inequality, but we find no robust evidence that any kind of social spending negatively moderates the association between economic globalization and inequality.

Andreas Bergh

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Mob: 070 779 0734
andreas.bergh@ifn.se

Therese Nilsson

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Ph: +46 46 222 4643
Mob: +46 73 396 7919
therese.nilsson@nek.l...

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