Multilevel Meta-Analysis of the Relationship between Financial Liberalization and Income Inequality

The proposed effect of financial liberalization on income distribution has gradually attracted the attention of economists, but research findings are inconsistent and even contradictory. To this end, after reviewing the content and results of experimental studies in the field of financial liberalization and income distribution, and filtering based on the meta-analysis protocol, 28 cross-country studies with 591 regressions and 753 coefficients were selected for analysis. Studies that did not fit the protocol or had insufficient information to extract data were excluded. The results of combining and concluding the studies show that there is a small negative relationship between financial liberalization and income inequality after accounting for diffusion bias. The results of the study also show that the indicators used to measure financial liberalization and income distribution, time period, country sample, presence or absence of financial development variables, economic growth, democracy, financial crisis, education, institutional quality, number of labor force, union, inflation, trade openness, technology, and government spending in the model of each study effectively explain the differences in the results of each study.JEL Classification: G15, F36, D63.