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How does increased integration to the global economy affect patterns of social provision at the local level? This study investigates the impact of economic openness on the subnational variation of welfare provision in China. Examining welfare expansion as a political response to provincial economic integration, I analyze how the effect of globalization on welfare expansion is conditioned by the threat of social unrest. Using a panel dataset on 31 provinces in China from 2001 to 2015, I find that provinces with open economies and higher threat of social unrest provide broader social insurance coverage. On the other hand, provinces with similar levels of economic openness but with lower levels of social unrest are associated with lower levels of coverage. These findings suggest that provincial governments may be more likely to utilize social policy instruments to compensate for the social costs of globalization, particularly in cases where exposure to the international market leads to increased social instability and discontent. [ABSTRACT FROM AUTHOR]

We examine how trade openness influences income inequality within countries. The sample includes 139 countries over the period 1970–2014. We employ predicted openness as instrument to deal with the endogeneity of trade openness. The effect of trade openness on income inequality differs across countries. Trade openness tends to disproportionately benefit the relative income shares of the very poor, but not necessarily all poor, in emerging and developing economies. In most advanced economies, trade openness increased income inequality, an effect that is driven by outliers. Our results suggest a strong effect of trade openness on inequality in China and transition countries. [ABSTRACT FROM AUTHOR]