Income distribution, factor endowments, and hade openness

This paper studies the empirical links among factor endowments, trade and p ersonal income distribution. By using panel data, we show that land and cap ital intensive countries have a less equal income distribution while skill intensive countries have a more equal income distribution. We also show tha t the effects of trade openness on inequality depend on factor endowments i n a way consistent with several recent case studies but not with the simple Hecksher-Ohlin framework. Our results are robust to the division of the sa mple according to level of income, the inclusion of different regressors, t he use of different measures of trade openness and of relative factor abund ance, and tests for possible problems of endogeneity. (C) 1999 Elsevier Sci ence B.V. All rights reserved.