Globalization — Inequality Nexus in the US and UK: A Multi-Dimensional Perspective

Abstract

Equitable income distributions occupy a top spot on the list of the United Nations (UN) Sustainable Development Goals (SDG[Formula: see text]). Nonetheless, prior empirical inquiries noted several factors, including globalization as the determinant of income inequality, albeit divergent inferences. However, very little is known about the potential effects of other variants of globalization (economic, social, cultural and political) on income inequality. Hence, this study, through a multi-dimensional scale, provides a comprehensive empirical overview of the effects of globalization on income inequality in the United States and the United Kingdom between 1970 and 2018. The study adopts the Autoregressive Distributed Lag (ARDL) and Kernel Regularized Least Squares (KRLS) models for broad-based empirical narratives. The empirical estimates rectify that globalization and its variants influenced income distributions significantly more in the US than in the UK. Particularly, at the 25th and 50th quantiles, globalization produced significant inequality-reducing effects in the UK. This indicates varying outcomes across the distributions of income inequality. Hence, constant monitoring is critical to curtail the influence of globalization on income distributions. The study also revealed that the existing patterns of income distributions in both countries would not guarantee the attainment of SDG[Formula: see text]. However, if laborers are compensated adequately, the attainment of SDG[Formula: see text] is certain. Thus, relevant policy options that will ensure equitable prosperity in both countries are highlighted.