The impact of globalization and financial development on India's income inequality

This paper empirically examines the combined effects of globalization and financial development on income inequality in a unified framework for an emerging economy. Using annual data for the Indian economy over the period 1980-2014, we show that the perceived benefits of globalization and financial development have not trickled down; rather, has aggravated income inequality. Our results also indicate that while inflation aggravates income inequality, education seems to alleviate the differential effect. Proactive measures in providing access to financial services, creating equitable employment opportunities, and improving the quality of education are required to offset the negative impacts of globalization and financial development on income disparity. (c) 2021 The Society for Policy Modeling. Published by Elsevier Inc. All rights reserved.

Automated summary

This study found that globalization and financial development exacerbate income inequality in the Indian economy, while education can alleviate this differential effect. Proactive measures such as providing access to financial services, creating equitable employment opportunities, and improving education quality are necessary to offset the negative impacts of globalization and financial development on income disparity.