Global trends in relative and absolute income inequality
Main Article Content
Keywords
Global income inequality, relative inequality, absolute inequality, personal income distribution
Abstract
This paper provides an overview of historic worldwide trends in relative and absolute income inequality. Depending on the concept used, inequality trends differ considerably. Inequality between countries increased strongly during 1820-2000 and started decreasing at the beginning of the twenty-first century, whether measured in relative or absolute terms. Within-country inequality, on the contrary, grew especially strongly during the last decades: Its growth rate accelerated after 1950 in absolute terms and after 1975 in relative terms. Absolute global inequality also increased substantially in the post-1950 period, whereas relative global inequality decreased slightly during this period.
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References
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http://dx.doi.org/10.1017/CBO9780511492266
Anand, S. and Segal, P. (2008). What Do We Know about Global Income Inequality?. Journal of Economic Literature, 46(1): 57-94.
http://dx.doi.org/10.1257/jel.46.1.57
Anand, S. and Segal, P. (2015). The Global Distribution of Income. In Atkinson, A.B. and Bourguignon, F. (eds.): Handbook of Income Distribution. Oxford: North-Holland, Ch.11.
http://dx.doi.org/10.1016/b978-0-444-59428-0.00012-6
Agnew, R. (1985). A revised strain theory of delinquency. Social Forces, 64(1): 151-167.
http://dx.doi.org/10.1093/sf/64.1.151
Agnew, R. (1992). Foundation for a generalism strain theory of crime and delinquency. Criminology, 30(1): 47-87.
http://dx.doi.org/10.1111/j.1745-9125.1992.tb01093.x
Atkinson, A.B. (1997). Bringing income distribution in from the cold. The Economic Journal, 107(441): 297-321.
http://dx.doi.org/10.1111/j.0013-0133.1997.159.x
Atkinson, A.B. and Brandolini, A. (2001). Promise and Pitfalls in the Use of 'Secondary' Data-Sets: Income Inequality in OECD Countries. Journal of Economic Literature, 39(3): 771-799.
http://dx.doi.org/10.1257/jel.39.3.771
Atkinson, A.B. and Brandolini, A. (2010). On Analyzing the World Distribution of Income. World Bank Economic Review, 24(1): 1-37.
http://dx.doi.org/10.1093/wber/lhp020
Atkinson, A.B., Piketty, T. and Saez, E. (2011). Top Incomes in the Long Run of History. Journal of Economic Literature, 49(1): 3–71.
http://dx.doi.org/10.1257/jel.49.1.3
Ballano, C. and Ruiz-Castillo, J. (1993). Searching by questionnaire for the meaning of income inequality. Revista Espa-ol de Economía, 10(2): 233-259.
Bourguignon, F. and Morrisson, C. (2002). Inequality among World Citizens: 1820-1992. American Economic Review, 92(4): 727-744.
http://dx.doi.org/10.1257/00028280260344443
Breton, T. and García, J.J. (2015). ICP 2005 Construction Prices: Are They Underestimated in Developing Countries?. Review of Income and Wealth, DOI: 10.1111/roiw.12170.
http://dx.doi.org/10.1111/roiw.12170
Chakravarty, S.R. (2001). The variance as a subgroup decomposable measure of inequality. Social Indicators Research, 53(1): 79-95.
http://dx.doi.org/10.1023/A:1007100330501
Chakravarty, S.R. and Tyagarupananda, S. (2009). The subgroup decomposable intermediate indices of inequality. Spanish Economic Review, 11(2): 83-97.
http://dx.doi.org/10.1007/s10108-008-9045-7
Cornia, G.A. (2010). Income Distribution under Latin America's New Left Regimes. Journal of Human Development and Capabilities, 11(1): 85-114.
http://dx.doi.org/10.1080/19452820903481483
Cowell, F.A. (2000). Measuring Income Inequality. London: Harvester Wheatsheaf.
Deaton, A. (2010). Price indexes, inequality, and the measurement of world poverty. American Economic Review, 100(1): 5-34.
http://dx.doi.org/10.1257/aer.100.1.5
Deaton, A. and Aten, B. (2015). "Trying to Understand the PPPs in ICP2011: Why are the Results so Different?", NBER Working Paper, No. 20244 (update March 2015).
Ehrlich, I. (1973). Participation in illegitimate activities: a theoretical and empirical investigation. Journal of Political Economy, 81(3): 521-65.
http://dx.doi.org/10.1086/260058
Ellis, L. and Kathryn S. (2010). The global upward trend in the profit share. Applied Economics Quarterly, 56(3): 231-255.
http://dx.doi.org/10.3790/aeq.56.3.231
Fleisher, B.M. (1966). The effect of income on delinquency. American Economic Review, 56(1/2): 118-37.
Francois, J.F. and Rojas-Romagosa, H. (2007). 'The Construction and Interpretation of Combined Cross-Section and Time-Series Inequality Datasets'. IIDE Discussion Paper No. 200708-05.
Froud, J., Johal, S., Haslam, C. and Williams, K. (2001). Accumulation under conditions of inequality. Review of International Political Economy, 8(1):66-95.
http://dx.doi.org/10.1080/09692290010010326
Gasparini, L., Cruces, G. and Tornarolli, L. (2011). Recent Trends in Income Inequality in Latin America. Economía, 11(2):147-190.
http://dx.doi.org/10.1353/eco.2011.0002
Goda, T. (2013). 'Changes in income inequality from a global perspective: an overview'. PKSG Working Paper, No. 1303.
http://dx.doi.org/10.2139/ssrn.2486888
Goda, T. and Lysandrou, P. (2014). The contribution of wealth concentration to the subprime crisis: a quantitative estimation. Cambridge Journal of Economics, 38(2): 301-27.
http://dx.doi.org/10.1093/cje/bet061
Goda, T. and Torres García, A. (2016). The Rising Tide of Absolute Global Income Inequality During 1850–2010: Is It Driven by Inequality Within or Between Countries?. Social Indicators Research, first online, doi: 10.1007/s11205-015-1222-0.
http://dx.doi.org/10.1007/s11205-015-1222-0
Hagan, J., & Peterson, R.D. (1995). Criminal inequality in America: Patterns and consequences. In Hagan, J. and Peterson, R.D. (eds.): Crime and inequality. Stanford: Stanford University Press, pp. 14-36.
Halter, D., Oechslin, M. and Zweimüller, J. (2014). Inequality and growth: the neglected time dimension. Journal of Economic Growth, 19(1): 81-104.
http://dx.doi.org/10.1007/s10887-013-9099-8
Harrison, E. and Seidl, C. (1994). Perceptional inequality and preferential judgments: An empirical examination of distributional axioms. Public Choice, 79(1-2): 61-81.
http://dx.doi.org/10.1007/BF01047919
Hein, E. (2012). The macroeconomics of finance-dominated capitalism - and its crisis. Cheltenham:Edward Elgar.
http://dx.doi.org/10.4337/9781781009161
Henry, J.S. (2012). 'The price of offshore revisited: New estimates for 'missing' global private wealth, income, inequality, and lost taxes'. Tax Justice Network Research Paper, 22nd July.
Herzer, D. and Vollmer, S. (2012). Inequality and growth: evidence from panel cointegration. Journal of Economic Inequality, 10(4): 489-503.
http://dx.doi.org/10.1007/s10888-011-9171-6
Herzer, D. and Vollmer, S. (2013). Rising top incomes do not raise the tide. Journal of Policy Modeling, 35(4): 504-19 ILO (2008). World of work report 2008: income inequalities in the age of financial globalization. Geneva: International Labour Organization.
Immervoll, H. and Richardson, L. (2011). Redistribution Policy and Inequality Reduction in OECD Countries: What Has Changed in Two Decades? OECD Social, Employment and Migration Working Paper No. 122.
Keister, L.A. (2014). The One Percent. Annual Review of Sociology, 40: 347-367.
http://dx.doi.org/10.1146/annurev-soc-070513-075314
Kumhof, M., Ranciére, R. and Winant, P. (2015). Inequality, Leverage, and Crises. American Economic Review, 105(3):1217-1245.
http://dx.doi.org/10.1257/aer.20110683
Kuznets, S. (1955). Economic growth and income inequality. American Economic Review, 45(1): 1-28.
Kuznets, S. (1965). Economic Growth and Structure: selected essays. London: Heinemann Educational Books.
Lakner, C. and Milanovic, B. (2013). Global Income Distribution: From the Fall of the Berlin Wall to the Great Recession. World Bank Policy Research Working Paper, No. 6719.
http://dx.doi.org/10.1596/1813-9450-6719
Lustig, N. and Gasparini, L. (2011). The Rise and Fall of Income Inequality in Latin America. In Ocampo, J.A. and Ros, J. (eds.): The Oxford Handbook of Latin American Economics. New York: Oxford University Press, pp. 691-714.
Milanovic (2013). Global Income Inequality in Numbers: in History and Now. Global Policy, 4(2): 198-208.
Milanovic, B. (2005). Worlds Apart: Measuring International and Global Inequality. Princeton: Princeton University Press.
Milanovic, B. (2012). Global inequality recalculated and updated: the effect of new PPP estimates on global inequality and 2005 estimates. Journal of Economic Inequality, 10(1): 1-18.
http://dx.doi.org/10.1007/s10888-010-9155-y
OECD (2011). 'Growing Income Inequality in OECD Countries: What Drives it and How Can Policy Tackle it?'. OECD Forum on tackling inequality, Paris, 2 May.
Onaran, O. and Galanis, G. (2014). Income distribution and growth: a global model. Environment and Planning A, 46(10): 2489-2513.
http://dx.doi.org/10.1068/a46265
Ostry, J.D., Berg, A., Tsangarides, C.G. (2014). Redistribution, Inequality, and Growth. IMF Staff Discussion Note, No. SDN/14/02.
http://dx.doi.org/10.5089/9781484352076.006
Oxfam (2014). Even it Up. Time to end extreme inequality. Oxford: Oxfam.
Palan, R., Murphy, R. and Chavagneux, C. (2010). Tax Havens: How globalization really works. New York: Cornell University Press.
Piketty, T. (2014). Capital in the Twenty-First Century. Cambridge Mass: Belknap Press of Harvard University Press.
http://dx.doi.org/10.4159/9780674369542
Pinkovskiy, M. and Sala-i-Martin, X. (2009). 'Parametric Estimations of the World Distribution of Income'. NBER Working Paper No. 15433.
Rajan, R.G. (2010). Fault Lines. How Hidden Fractures Still Threaten the World Economy. Princeton:Princeton University Press.
Ravallion, M. (2004). Competing Concepts of Inequality in the Globalization Debate. In Collins, S.M. and Graham, C. (eds.): Brookings Trade Forum 2004. Globalization, Poverty, and Inequality.
http://dx.doi.org/10.1596/1813-9450-3243
Washington: Brookings Institution Press, pp. 1-38.
Sala-i-Martin, X. (2006). The world distribution of income: falling poverty and ... convergence, period. Quaterly Journal of Economics, 71(2): 351-397.
http://dx.doi.org/10.1162/qjec.2006.121.2.351
Seers, D. (1972). What are we trying to measure?. Journal of Development Studies, 8(3): 21-36.
http://dx.doi.org/10.1080/00220387208421410
Solt, F. (2014). The standardized world income inequality database. Retrieved at 19 January 2016 from https://dataverse.harvard.edu/dataset.xhtml?persistentId=hdl:1902.1/11992.
Stiglitz, J.E. (2012). The Price of Inequality. London: Penguin Books
Stockhammer, E. (2015). Rising Inequality as a cause of the present crisis. Cambridge Journal of Economics, 39(3): 935-958.
http://dx.doi.org/10.1093/cje/bet052
van Treeck, T. (2014). Did inequality cause the U.S. financial crisis?. Journal of Economic Surveys, 28(3):421-48.
http://dx.doi.org/10.1111/joes.12028
van Zanden, J.L., Baten, J., Foldvari, P. and van Leeuwen, B. (2014). The Changing Shape of Global Inequality 1820-2000: Exploring a new dataset. Review of Income and Wealth, 60(2): 279-297.
http://dx.doi.org/10.1111/roiw.12014
Zucman, G. (2015). The hidden wealth of nations: The scourge of tax havens. Chicago: University of Chicago Press.
http://dx.doi.org/10.7208/chicago/9780226245560.001.0001
http://dx.doi.org/10.1017/CBO9780511492266
Anand, S. and Segal, P. (2008). What Do We Know about Global Income Inequality?. Journal of Economic Literature, 46(1): 57-94.
http://dx.doi.org/10.1257/jel.46.1.57
Anand, S. and Segal, P. (2015). The Global Distribution of Income. In Atkinson, A.B. and Bourguignon, F. (eds.): Handbook of Income Distribution. Oxford: North-Holland, Ch.11.
http://dx.doi.org/10.1016/b978-0-444-59428-0.00012-6
Agnew, R. (1985). A revised strain theory of delinquency. Social Forces, 64(1): 151-167.
http://dx.doi.org/10.1093/sf/64.1.151
Agnew, R. (1992). Foundation for a generalism strain theory of crime and delinquency. Criminology, 30(1): 47-87.
http://dx.doi.org/10.1111/j.1745-9125.1992.tb01093.x
Atkinson, A.B. (1997). Bringing income distribution in from the cold. The Economic Journal, 107(441): 297-321.
http://dx.doi.org/10.1111/j.0013-0133.1997.159.x
Atkinson, A.B. and Brandolini, A. (2001). Promise and Pitfalls in the Use of 'Secondary' Data-Sets: Income Inequality in OECD Countries. Journal of Economic Literature, 39(3): 771-799.
http://dx.doi.org/10.1257/jel.39.3.771
Atkinson, A.B. and Brandolini, A. (2010). On Analyzing the World Distribution of Income. World Bank Economic Review, 24(1): 1-37.
http://dx.doi.org/10.1093/wber/lhp020
Atkinson, A.B., Piketty, T. and Saez, E. (2011). Top Incomes in the Long Run of History. Journal of Economic Literature, 49(1): 3–71.
http://dx.doi.org/10.1257/jel.49.1.3
Ballano, C. and Ruiz-Castillo, J. (1993). Searching by questionnaire for the meaning of income inequality. Revista Espa-ol de Economía, 10(2): 233-259.
Bourguignon, F. and Morrisson, C. (2002). Inequality among World Citizens: 1820-1992. American Economic Review, 92(4): 727-744.
http://dx.doi.org/10.1257/00028280260344443
Breton, T. and García, J.J. (2015). ICP 2005 Construction Prices: Are They Underestimated in Developing Countries?. Review of Income and Wealth, DOI: 10.1111/roiw.12170.
http://dx.doi.org/10.1111/roiw.12170
Chakravarty, S.R. (2001). The variance as a subgroup decomposable measure of inequality. Social Indicators Research, 53(1): 79-95.
http://dx.doi.org/10.1023/A:1007100330501
Chakravarty, S.R. and Tyagarupananda, S. (2009). The subgroup decomposable intermediate indices of inequality. Spanish Economic Review, 11(2): 83-97.
http://dx.doi.org/10.1007/s10108-008-9045-7
Cornia, G.A. (2010). Income Distribution under Latin America's New Left Regimes. Journal of Human Development and Capabilities, 11(1): 85-114.
http://dx.doi.org/10.1080/19452820903481483
Cowell, F.A. (2000). Measuring Income Inequality. London: Harvester Wheatsheaf.
Deaton, A. (2010). Price indexes, inequality, and the measurement of world poverty. American Economic Review, 100(1): 5-34.
http://dx.doi.org/10.1257/aer.100.1.5
Deaton, A. and Aten, B. (2015). "Trying to Understand the PPPs in ICP2011: Why are the Results so Different?", NBER Working Paper, No. 20244 (update March 2015).
Ehrlich, I. (1973). Participation in illegitimate activities: a theoretical and empirical investigation. Journal of Political Economy, 81(3): 521-65.
http://dx.doi.org/10.1086/260058
Ellis, L. and Kathryn S. (2010). The global upward trend in the profit share. Applied Economics Quarterly, 56(3): 231-255.
http://dx.doi.org/10.3790/aeq.56.3.231
Fleisher, B.M. (1966). The effect of income on delinquency. American Economic Review, 56(1/2): 118-37.
Francois, J.F. and Rojas-Romagosa, H. (2007). 'The Construction and Interpretation of Combined Cross-Section and Time-Series Inequality Datasets'. IIDE Discussion Paper No. 200708-05.
Froud, J., Johal, S., Haslam, C. and Williams, K. (2001). Accumulation under conditions of inequality. Review of International Political Economy, 8(1):66-95.
http://dx.doi.org/10.1080/09692290010010326
Gasparini, L., Cruces, G. and Tornarolli, L. (2011). Recent Trends in Income Inequality in Latin America. Economía, 11(2):147-190.
http://dx.doi.org/10.1353/eco.2011.0002
Goda, T. (2013). 'Changes in income inequality from a global perspective: an overview'. PKSG Working Paper, No. 1303.
http://dx.doi.org/10.2139/ssrn.2486888
Goda, T. and Lysandrou, P. (2014). The contribution of wealth concentration to the subprime crisis: a quantitative estimation. Cambridge Journal of Economics, 38(2): 301-27.
http://dx.doi.org/10.1093/cje/bet061
Goda, T. and Torres García, A. (2016). The Rising Tide of Absolute Global Income Inequality During 1850–2010: Is It Driven by Inequality Within or Between Countries?. Social Indicators Research, first online, doi: 10.1007/s11205-015-1222-0.
http://dx.doi.org/10.1007/s11205-015-1222-0
Hagan, J., & Peterson, R.D. (1995). Criminal inequality in America: Patterns and consequences. In Hagan, J. and Peterson, R.D. (eds.): Crime and inequality. Stanford: Stanford University Press, pp. 14-36.
Halter, D., Oechslin, M. and Zweimüller, J. (2014). Inequality and growth: the neglected time dimension. Journal of Economic Growth, 19(1): 81-104.
http://dx.doi.org/10.1007/s10887-013-9099-8
Harrison, E. and Seidl, C. (1994). Perceptional inequality and preferential judgments: An empirical examination of distributional axioms. Public Choice, 79(1-2): 61-81.
http://dx.doi.org/10.1007/BF01047919
Hein, E. (2012). The macroeconomics of finance-dominated capitalism - and its crisis. Cheltenham:Edward Elgar.
http://dx.doi.org/10.4337/9781781009161
Henry, J.S. (2012). 'The price of offshore revisited: New estimates for 'missing' global private wealth, income, inequality, and lost taxes'. Tax Justice Network Research Paper, 22nd July.
Herzer, D. and Vollmer, S. (2012). Inequality and growth: evidence from panel cointegration. Journal of Economic Inequality, 10(4): 489-503.
http://dx.doi.org/10.1007/s10888-011-9171-6
Herzer, D. and Vollmer, S. (2013). Rising top incomes do not raise the tide. Journal of Policy Modeling, 35(4): 504-19 ILO (2008). World of work report 2008: income inequalities in the age of financial globalization. Geneva: International Labour Organization.
Immervoll, H. and Richardson, L. (2011). Redistribution Policy and Inequality Reduction in OECD Countries: What Has Changed in Two Decades? OECD Social, Employment and Migration Working Paper No. 122.
Keister, L.A. (2014). The One Percent. Annual Review of Sociology, 40: 347-367.
http://dx.doi.org/10.1146/annurev-soc-070513-075314
Kumhof, M., Ranciére, R. and Winant, P. (2015). Inequality, Leverage, and Crises. American Economic Review, 105(3):1217-1245.
http://dx.doi.org/10.1257/aer.20110683
Kuznets, S. (1955). Economic growth and income inequality. American Economic Review, 45(1): 1-28.
Kuznets, S. (1965). Economic Growth and Structure: selected essays. London: Heinemann Educational Books.
Lakner, C. and Milanovic, B. (2013). Global Income Distribution: From the Fall of the Berlin Wall to the Great Recession. World Bank Policy Research Working Paper, No. 6719.
http://dx.doi.org/10.1596/1813-9450-6719
Lustig, N. and Gasparini, L. (2011). The Rise and Fall of Income Inequality in Latin America. In Ocampo, J.A. and Ros, J. (eds.): The Oxford Handbook of Latin American Economics. New York: Oxford University Press, pp. 691-714.
Milanovic (2013). Global Income Inequality in Numbers: in History and Now. Global Policy, 4(2): 198-208.
Milanovic, B. (2005). Worlds Apart: Measuring International and Global Inequality. Princeton: Princeton University Press.
Milanovic, B. (2012). Global inequality recalculated and updated: the effect of new PPP estimates on global inequality and 2005 estimates. Journal of Economic Inequality, 10(1): 1-18.
http://dx.doi.org/10.1007/s10888-010-9155-y
OECD (2011). 'Growing Income Inequality in OECD Countries: What Drives it and How Can Policy Tackle it?'. OECD Forum on tackling inequality, Paris, 2 May.
Onaran, O. and Galanis, G. (2014). Income distribution and growth: a global model. Environment and Planning A, 46(10): 2489-2513.
http://dx.doi.org/10.1068/a46265
Ostry, J.D., Berg, A., Tsangarides, C.G. (2014). Redistribution, Inequality, and Growth. IMF Staff Discussion Note, No. SDN/14/02.
http://dx.doi.org/10.5089/9781484352076.006
Oxfam (2014). Even it Up. Time to end extreme inequality. Oxford: Oxfam.
Palan, R., Murphy, R. and Chavagneux, C. (2010). Tax Havens: How globalization really works. New York: Cornell University Press.
Piketty, T. (2014). Capital in the Twenty-First Century. Cambridge Mass: Belknap Press of Harvard University Press.
http://dx.doi.org/10.4159/9780674369542
Pinkovskiy, M. and Sala-i-Martin, X. (2009). 'Parametric Estimations of the World Distribution of Income'. NBER Working Paper No. 15433.
Rajan, R.G. (2010). Fault Lines. How Hidden Fractures Still Threaten the World Economy. Princeton:Princeton University Press.
Ravallion, M. (2004). Competing Concepts of Inequality in the Globalization Debate. In Collins, S.M. and Graham, C. (eds.): Brookings Trade Forum 2004. Globalization, Poverty, and Inequality.
http://dx.doi.org/10.1596/1813-9450-3243
Washington: Brookings Institution Press, pp. 1-38.
Sala-i-Martin, X. (2006). The world distribution of income: falling poverty and ... convergence, period. Quaterly Journal of Economics, 71(2): 351-397.
http://dx.doi.org/10.1162/qjec.2006.121.2.351
Seers, D. (1972). What are we trying to measure?. Journal of Development Studies, 8(3): 21-36.
http://dx.doi.org/10.1080/00220387208421410
Solt, F. (2014). The standardized world income inequality database. Retrieved at 19 January 2016 from https://dataverse.harvard.edu/dataset.xhtml?persistentId=hdl:1902.1/11992.
Stiglitz, J.E. (2012). The Price of Inequality. London: Penguin Books
Stockhammer, E. (2015). Rising Inequality as a cause of the present crisis. Cambridge Journal of Economics, 39(3): 935-958.
http://dx.doi.org/10.1093/cje/bet052
van Treeck, T. (2014). Did inequality cause the U.S. financial crisis?. Journal of Economic Surveys, 28(3):421-48.
http://dx.doi.org/10.1111/joes.12028
van Zanden, J.L., Baten, J., Foldvari, P. and van Leeuwen, B. (2014). The Changing Shape of Global Inequality 1820-2000: Exploring a new dataset. Review of Income and Wealth, 60(2): 279-297.
http://dx.doi.org/10.1111/roiw.12014
Zucman, G. (2015). The hidden wealth of nations: The scourge of tax havens. Chicago: University of Chicago Press.
http://dx.doi.org/10.7208/chicago/9780226245560.001.0001