Has income distribution really worsened in the South?

2000 Occasional Paper
By Rodas-Martini, Pablo

The North has become more unequal, in particular countries like the United States and the United Kingdom. This is the conclusion—at times categorical and at other times tinged—of numerous studies on the distribution of income done in recent years. Several reasons are argued: trade with the South reduces the demand for unskilled labour in industrialised countries; immigration increases the supply of this human resource; the new technology of information and telecommunications is biased towards skilled labour; the desindustrialisation2 of the North expels labour to the tertiary sector, where industries with high wage levels coexist with industries with low wages; the flexibilisation of labour markets, with the consequent weakening of trade unions, reduces the negotiating power of the labour force.