Globalization and income inequality: Evidence for Latin America

Abstract

This study explores the relationship between globalization and income inequality in twelve Latin American economies during the period 2000-2013 using panel data analyses. Based on the importance that the literature gives to a country's structure, the sample is grouped according to corruption levels, educational attainment levels, gross domestic product (GDP) and trade openness. The results show that higher trade openness generates a decrease in income inequality, while higher foreign direct investment increases it. Countries characterized by higher levels of corruption, trade openness and GDP take better advantage from globalization to decrease income inequality.