Has the increase in world-wide openness to trade worsened global income inequality?

This article contributes to our understanding of the relationship between globalization and world income inequality by analyzing the trend in global inequality for the period 1960–1989. Using Penn World Tables data and time-series econometric techniques, it analyzes how the increase in worldwide openness to trade has been related to global income inequality during this period. When differential population growth rates among the countries are taken into account, the results indicate that (i) global income inequality exhibited a downward trend between 1960 and 1989, and (ii) while there is a positive relationship between inequality and openness, the relationship is not statistically significant. Copyright Regional Science Association International (RSAI) Urbana, USA 2002