Abstract
After two centuries of growing global inequality, faster growth in Asia compared to the West has seen this trend start to recede. Inequality within countries, however, has generally risen, though perhaps more in perception than in fact. The allocation of responsibility for this, between technology, growing monopoly power, and the surge in labour supply due to globalisation and demography, is complex and uncertain. One might have expected such rising within-country inequality to benefit left-leaning political parties (and it did in Latin America). But in North America and Europe, it has led to rising support for right-wing, populist parties. Goodhart and Pradhan attribute this largely to the public’s distaste for large-scale immigration. Immigration is an issue that sharply divides the views of mainstream economists, who mainly welcome it, and the public at large, who want it to be restricted.
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Notes
- 1.
Pace Desmet et al. (2018), we do not think that density of population is sufficient, or necessary, by itself to stimulate innovation and rising productivity. We pursue this topic further in Chapter 10 on India and Africa.
- 2.
Kuznets was a Nobel Prize-winning, empirical economist working at Harvard, with whom Goodhart worked temporarily as a Research Assistant in 1960/1961.
- 3.
The Gini index is a measure of statistical dispersion intended to represent income or wealth distribution of a nation’s residents and is the most commonly used measure of inequality. The data for the Gini index (World Bank estimate) are based on primary household survey data obtained from government statistical agencies and World Bank country departments. For more information and methodology, please see PovcalNet. Zero would represent absolute equality and 1 absolute inequality, so an increase implies rising inequality.
- 4.
Autor also shows that the loss of mid-skilled jobs was the greater the higher the density of the population, op. cit., pp. 13–15 and Figure 6, i.e. that the proportionate rate of mid-skill job loss has been greatest in urban and metropolitan areas. Why this has been so, and whether this is also the case in other advanced countries is less clear. Bayoumi and Barkema (2019) argue that greater inequality, and higher housing prices, have reduced internal migration in the USA and thereby made the situation of those trapped in decaying areas even worse.
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Goodhart, C., Pradhan, M. (2020). Inequality and the Rise of Populism. In: The Great Demographic Reversal. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-42657-6_7
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DOI: https://doi.org/10.1007/978-3-030-42657-6_7
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