Trade openness and income inequality: New empirical evidence

We examine how trade openness influences income inequality within countries. The sample includes 139 countries over the period 1970–2014. employ predicted as instrument to deal with endogeneity of openness. effect on differs across Trade tends disproportionately benefit relative shares very poor, but not necessarily all in emerging and developing economies. In most advanced economies, increased inequality, an that is driven by outliers. Our results suggest a strong China transition