Chapter 1 Globalization and income inequality
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Globalization generates winners and losers within both developed and developing countries. Economic globalization influences workers' earnings and employment within a country through various factors such as industry affiliation, firm type, and location. The global production network has increased trade competition, foreign investments, and technological advances, which increased the demand for, and income of, relatively skilled workers in emerging markets as well as advanced economies. It has also provided global markets with mobile capital and enlarged capital profits relative to labor. Yet, the adverse effects of globalization are concentrated in certain social groups, firms, industries, and regions, and are often persistent or even magnified over time. The role of governments in income insurance and education is critical to mitigating these effects, but it is often constrained by the limited fiscal resources and efficiency pressures of the global market.

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