The Influence of Globalization on the Change and Convergence of Social Security Transfer: An Empirical Analysis for OECD Counties

Using a cross-section of OECD countries, this paper examines the relationship between globalization and the change and convergence of social security transfer. Globalization has arguably had a profound impact on the use of social protection in states, since it is normally accompanied with increases in income inequality, polarization, and unemployment. In addition, globalization may lead to socio- economic policy harmonization across countries. The empirical results show that there exists a significant and positive relationship between social security transfer in GDP and the globalization index based on political, economic, and social integrations. Also, we found the convergence phenomenon of social security transfer in OECD countries, applying the traditional methodology of convergence and convergence. Therefore, there is evidence in OECD countries that globalization indirectly affects the convergence of social security transfer in addition to direct relation to social security transfer in GDP.