Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/203027 
Year of Publication: 
2018
Series/Report no.: 
LIS Working Paper Series No. 741
Publisher: 
Luxembourg Income Study (LIS), Luxembourg
Abstract: 
Many countries in the Western hemisphere are currently experiencing a backlash against globalization. Most of the research examining the issue has concentrated on international specialization and within-country income inequality as main drivers of the backlash. Doing so, the discussion has primarily revolved around the question whether and to what extend the income distribution has widened and whether trade is responsible indeed. However, political trends may be more grounded in perceptions than facts, thus giving rise to inappropriate populist policies. The difference matters all the more as the former may be accentuated by (social) media. Drawing mainly on subjective well-being (SWB) data from theWorld Values Survey (WVS) and income statistics from the Luxembourg Income Study (LIS), this paper shows in an international cross-section analysis that income inequality is perceived very differently depending on openness to trade. The relevance of perceptions has wider politico-economic implications in that it carries the risk of costly anti-trade policies, without necessarily narrowing the income distribution.
Subjects: 
Subjective Well-Being
International Trade
Income Distribution
Inequality
Identity
JEL: 
F61
F13
D63
D31
Document Type: 
Working Paper

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