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Economic activities worldwide are becoming increasingly integrated, in terms of freely traded consumption, globalized production as well as information sharing alike. The tightened linkages are thought to improve resource allocation, promote technology transfer and enhance living standard, while the challenge for policymakers is to ensure that these benefits are sufficiently widely shared. It highlights the importance of understanding how economic integration affects labor. My dissertation focuses on the how integration shapes the organization of production and the effects on the well-being. The first chapter focuses the impacts of integration by removing information transmission barrier on the diffusion of economic activities as well as its welfare and inequality consequence. The paper studies the aggregate and distributional impacts of high-speed railways (HSR) in an economy with internal trade and migration costs. I make two contributions to the understanding of the impacts of large transportation infrastructure projects. Firstly, taking advantage of the rapid expansion as plausible exogenous shocks that improves firm-to-firm matching efficiency across regions over time, I identify the causal relationship between HSR connection and exporting performance in case of China. We find the connection to HSR significantly promotes a region's exports. Besides the direct impact, I also find the positive spillovers of HSR, and such effect is stronger in areas closer to HSR hubs. Our second contribution is to shed light on the mechanisms at work by relating the HSR-driven regional outsourcing to the HSR-driven increases in welfare and inequality. To do so, I construct and calibrate a quantitative spatial equilibrium model with producer-supplier linkage, taking care of trade, migration, and outsourcing in a unified framework to examine the general equilibrium effects of the HSR and to perform counterfactuals. Chapter 2 studies the role of international trade for household income polarization, the phenomenon in which the size of high- and low-income groups increases but mid-income group declines. I propose a new channel that emphasizes the supply change of skills in rationalizing the phenomenon. We build a simple theory of trade featuring endogenous choices on occupation and firm productivity. In the model, individuals choose to become low-skilled, high-skilled workers, or entrepreneurs based on their innate abilities. Entrepreneurs improve the firm efficiency by investing in the managerial effort. I show that while the households with high human capital optimally respond to export opportunity by moving up the income distribution, other households with median level human capital self-select downward the income distribution, the long run consequence of which may be the polarization in labor market. An empirical test of the model reveals that Chinese regions facing more export exposure exhibit stronger pattern of labor market polarization. While my first two research focus on the welfare changes within-country in case of the largest developing country in the world, China, my third part of dissertation compares a country's living standard in an international framework. Chapter 3, a joint work with my advisor Robert Feenstra and Alexis Antoniades, compares the cost of living for cities in China and in the United States using barcode data, as a complement to the International Comparisons Program (ICP) supervised by the World Bank. We find that, in both countries, there is a greater variety of products in larger cities. But in China, unlike the United States, the prices of products tend to be lower in larger cities. We attribute the lower prices to a pro-competitive effect, whereby larger cities attract more brands and retailers which leads to lower markups and prices. Combining the effect of greater variety and lower prices, it follows that the cost-of-living for grocery-store products in China is lower in larger cities. We further compare the cost-of-living indexes for particular product categories between China and the United States. In product categories with a significant presence of U.S. brands in the Chinese market, the availability of additional Chinese brands leads to greater variety than in the United States, and therefore lower Chinese price indexes for that reason. In product categories with much less presence of U.S. brands in the Chinese market, however, the observed prices differences between the countries (usually lower prices in China) are partially or fully offset by the variety differences (less variety in China), so that the cost of living in China is not as low as the price differences suggest, especially in smaller cities.
From the oceans to continental heartlands, human activities have altered the physical characteristics of Earth's surface. With Earth's population projected to peak at 8 to 12 billion people by 2050 and the additional stress of climate change, it is more important than ever to understand how and where these changes are happening. Innovation in the geographical sciences has the potential to advance knowledge of place-based environmental change, sustainability, and the impacts of a rapidly changing economy and society. Understanding the Changing Planet outlines eleven strategic directions to focus research and leverage new technologies to harness the potential that the geographical sciences offer.
Globalization - the growing integration of economies and societies around the world, is a complex process. The focus of this research is the impact of economic integration on developing countries and especially the poor people living in these countries. Whether economic integration supports poverty reduction and how it can do so more effectively are key questions asked. The research yields 3 main findings with bearings on current policy debates about globalization. Firstly, poor countries with some 3 billion people have broken into the global market for manufactures and services, and this successful integration has generally supported poverty reduction. Secondly, inclusion both across countries and within them is important as a number of countries (pop. 2 billion) are failing as states, trading less and less, and becoming marginal to the world economy. Thirdly, standardization or homogenization is a concern - will economic integration lead to cultural or institutional homogenization?
This paper examines the relationship between income inequality and economic growth in the United States. Drawing on existing literature and empirical data, we analyze the effects of income inequality on the US GDP using statistical methods such as linear modeling. Our results show that high levels of income inequality are a barrier to sustained economic growth, as the concentration of wealth in a few individuals limits overall consumer spending and investment. Additionally, we find that income inequality exacerbates social and political instability, leading to further negative consequences for economic growth. We conclude that addressing income inequality through policy interventions such as progressive taxation and redistribution is essential for promoting long-term economic prosperity and equity in the United States. Our research contributes to the ongoing discourse on income inequality and its implications for economic growth and highlights the need for evidence-based policy solutions to address this pressing issue.
This paper analyzes the extent of income inequality from a global perspective, its drivers, and what to do about it. The drivers of inequality vary widely amongst countries, with some common drivers being the skill premium associated with technical change and globalization, weakening protection for labor, and lack of financial inclusion in developing countries. We find that increasing the income share of the poor and the middle class actually increases growth while a rising income share of the top 20 percent results in lower growth—that is, when the rich get richer, benefits do not trickle down. This suggests that policies need to be country specific but should focus on raising the income share of the poor, and ensuring there is no hollowing out of the middle class. To tackle inequality, financial inclusion is imperative in emerging and developing countries while in advanced economies, policies should focus on raising human capital and skills and making tax systems more progressive.
Is there a tradeoff between raising growth and reducing inequality and poverty? This paper reviews the theoretical and empirical literature on the complex links between growth, inequality, and poverty, with causation going in both directions. The evidence suggests that growth can be effective in reducing poverty, but its impact on inequality is ambiguous and depends on the underlying sources of growth. The impact of poverty and inequality on growth is likewise ambiguous, as several channels mediate the relationship. But most plausible mechanisms suggest that poverty and inequality reduce growth, at least in the long run. Policies play a role in shaping these relationships and those designed to improve equality of opportunity can simultaneously improve inclusiveness and growth.
Identifies the major weaknesses in the current United Nations system and proposes fundamental reforms to address each. This title is also available as Open Access.
In the United States, some populations suffer from far greater disparities in health than others. Those disparities are caused not only by fundamental differences in health status across segments of the population, but also because of inequities in factors that impact health status, so-called determinants of health. Only part of an individual's health status depends on his or her behavior and choice; community-wide problems like poverty, unemployment, poor education, inadequate housing, poor public transportation, interpersonal violence, and decaying neighborhoods also contribute to health inequities, as well as the historic and ongoing interplay of structures, policies, and norms that shape lives. When these factors are not optimal in a community, it does not mean they are intractable: such inequities can be mitigated by social policies that can shape health in powerful ways. Communities in Action: Pathways to Health Equity seeks to delineate the causes of and the solutions to health inequities in the United States. This report focuses on what communities can do to promote health equity, what actions are needed by the many and varied stakeholders that are part of communities or support them, as well as the root causes and structural barriers that need to be overcome.