Globalization and Income Distribution: Examining the Winners and Losers in a Connected World

Abstract

Globalization has become a pervasive force shaping economic landscapes worldwide, but its impact on income distribution remains a subject of intense debate. the winners and losers of globalization, shedding light on the complex dynamics that shape income distribution in an interconnected world. Drawing on a rich body of theoretical frameworks and empirical evidence, we explore how globalization influences income distribution through various channels. We analyze the effects of trade liberalization, foreign direct investment, technological advancements, and labor market integration on income inequality within and across countries. Our analysis reveals a nuanced picture of globalization's impact on income distribution. While globalization has facilitated economic growth and lifted millions out of poverty, it has also exacerbated income disparities, leading to heightened inequality within and between nations. We identify several mechanisms through which globalization affects income distribution, including skill-biased technological change, outsourcing, and offshoring.