Department of Economics and Business - Universitat Pompeu Fabra

Title:: Globalization, technology and inequality
Author:: Gino Gancia
Date:: February 2012 (Revised: November 2012)
Abstract:: What are the effects of international integration on inequality, both between and within countries? The growing evidence that technology is the main determinant of wage and income differences may seem to imply that the forces of globalization only play a secondary role. Such a conclusion is however premature, in that it neglects the effect of international integration on technology itself. This opuscle summarizes recent and ongoing research studying how two important aspects of globalization, trade in goods and offshoring of production, shape the distribution of income when technological progress is endogenous. It discusses the theoretical foundations and the empirical support for various mechanisms through which international integration may change the incentive to develop and adopt new technologies and how this affects wages and the return to skill around the world.
Area of Research:: Macroeconomics and International Economics

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