Asymmetric Globalization, Top Performers’ Income and Inequality

Working Paper 2023-634

Abstract

This paper proposes a new explanation for the rise in top performers’ income based on an asymmetry in globalization, with one country producing globalized non-rivalrous performances (music, films, series, entertainment programmes etc.) whereas other countries produce purely domestic ones. In the country with globalized performances, the globalization dynamics (growing number of countries involved in the global market) entails an increase in the number and incomes of performers and an increase in inequality by the top. In countries with purely national performances, the participation in the global economy reduces the number and incomes of performers and lessens inequality by the top. In contrast, when globalization is symmetric (all countries producing globalized performances), there is no change in the number and incomes of performers in all countries compared to cultural autarky. These results are in line with several characteristics observed in activities directly impacted by the cultural supremacy of American and English speaking countries in the global economy: 1) the share of Anglo-Saxon countries in the top 100 richest is substantially higher for actresses, actors, singers and TV show and film producers than for other occupations (CEOs, businessmen etc.), 2) the increase in the share of top incomes is significantly higher in Anglo-Saxon countries, and 3) the increase in inequality is greater in those countries.

Authors: Joel Hellier.