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Title: Trade and Inequality in the US and UK: Cohort Perspective

Citation Type: Working Paper

Publication Year: 2010

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Abstract: In this study I first discuss that within-country inequality indexes give enduring response to thestructural changes in the economy due to the cohort structure of the population. This is importantsince it may lead to relationships between inequality and other variables going undetected in linearregression estimates, or in similar methods measuring linear correlation. I suggest an alternativemeasure of inequality to be used in regression estimates: the average growth rate of within-cohortinequalities. As an empirical methodology, I first construct within-cohort inequalities from US andUK micro data, and then re-examine the effect of globalization on inequality. My emphasis ison trade liberalization, as current regression estimates using aggregate inequality indexes find aweakening effect of trade liberalization on inequality, inconsistent with the general consensus. Withthe proposed measure of inequality, I find that the relationship between the variables are found tobe positive and significant, which is consistent with trade theory and a substantial part of the tradeliterature.

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Authors: Eksi, Ozan

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Institution: Universitat Pompeu Fabra

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Publisher Location: Barcelona, Spain

Data Collections: IPUMS CPS

Topics: Labor Force and Occupational Structure, Poverty and Welfare

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