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International Transmission of Inequality through Trade

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Analysis shows exporting to unequal countries increases domestic inequality, highlighting trade's role in income distribution.

Exporting to countries with higher inequality increases domestic income inequality, showing a direct connection.
The calibrated model indicates that international transmission accounts for 4.4% of Gini coefficient levels and 4.8% of top 1% income shares.
Firm-level and aggregate data support the idea that consumer targeting by firms shapes income distribution dynamics.
This research highlights the link between international trade patterns and domestic income inequality, necessitating policy attention.

Sergey Nigai (2025) studied this question.

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