World Income Inequality 1820-2000 1

2015

The aim of this paper is to present a new dataset of global inequality between 1820 and the present, based on the available historical evidence, and to tentatively analyse some of the results that emerge from these data. The importance of the subject hardly needs to be stressed: the enormous increase of inequality on a global scale is one of the most

Review of Income and Wealth, 2014

A new dataset for estimating the development of global inequality between 1820 and 2000 is presented, based on a large variety of sources and methods for estimating (gross household) income inequality. On this basis, and two sets of benchmarks for estimating between-country inequality (the Maddison 1990 benchmark and the recent 2005 ICP round), we estimate the evolution of global income inequality and of the number of people below various poverty lines over the past two centuries. We find that between 1820 and 1950 increasing per capita income is combined with increasing global inequality, and with an increase in the absolute number of people below the poverty line. After 1950 global inequality as measured by the Gini coefficient remains more or less constant, and also the number of poor starts to decline in absolute terms. It also appears that the global income distribution was uni-modal in the 19 th century, became increasingly bi-modal between 1910 and 1970 with two world wars, a depression and de-globalization, and was suddenly transformed back into a uni-modal distribution between 1980 and 2000.

How Was Life? OECD, 2014

This chapter focuses on income inequality as measured by gross (i.e. pre-tax) household income across individuals within a country. It builds upon a number of large-scale initiatives to chart income inequality trends over time, supplementing them with data on wages and heights for the earlier period. Income inequality trends follow a U-shape in most Western European countries and the Western Offshoots. It declined between the end of the 19th century until about 1970, followed by a rise. In Eastern Europe, communism resulted in strong declines in income inequality, followed by a sharp increase after its disintegration in the 1980s. In other parts of the world (China in particular) income inequality is on the rise recently. The chapter also provides evidence on the global income distribution, i.e. assuming all people belong to the same community. This distribution was unimodal in the 19th century, became increasingly bi-modal between 1910 and 1970 and suddenly reverted back into a unimodal distribution between 1980 and 2000.

2022

The paper reestimates global inequality between 1820 and 1980, reappraises the results up to 2013, and presents new inequality estimates for 2018. It shows that historically, global inequality has followed three eras: the first, from 1820 until 1950, characterized by rising income differences both between and within countries; the second, from 1950 to the last decade of the 20 th century, with very high global and between-country inequality; and the current one of decreasing inequality thanks to the rise of Asian incomes, and especially so Chinese. The present era has seen the emergence of the global "median" class and the greatest reshuffling in income positions between the West and China since the Industrial Revolution. Absolute income differences in the past 30 years have however increased, and the income gap between the "core" and the poor "periphery" (if China is excluded) remains large: the ratio between median income in the core and periphery in 2018 exceeds 8 to 1 in PPP terms, and 22 to 1 in nominal dollars. At the current rate of periphery's convergence, it would take three centuries for the poor countries to have one-half of its population at, or above, the median income of the poorest core country. The evolution of global inequality in the future will much more depend on what happens to the growth rates and inequality in India and large African countries than on China.

Correspondence: [email protected] 1 At some point we hope to experiment with the alternative set of estimates produced by Prados de la Escosura 2000.

Explorations in Economic History, 2011

Using social tables, we make an estimate of global inequality (inequality among world citizens) in early 19th century. We then show that the level and composition of global inequality have changed over the last two centuries. The level has increased reaching a high plateau around 1950s, and the main determinants of global inequality have become differences in mean country incomes

Social Indicators Research, 2017

This paper is the first to decompose absolute global income inequality into its within-country and between-country component. The results show a continuous increase of absolute global inequality during 1850-2010, which can be separated into three distinct phases: (i) between 1850 and 1929, within-country inequality explained up to 76% of absolute global inequality, yet the growth rates of within-and between-country inequality were very similar; (ii) a sharp increase in the importance of between-country inequality occurred during the 1929-1950 period, which was followed by a period during which the within-and between-country components were approximately equally relevant; and (iii) after 1985, the growth in absolute global inequality was driven primarily by the accelerated growth of within-country income differences. Currently, within-country inequality explains 70% of absolute global market inequality, a figure close to that of the year 1850. Additional findings include that absolute income convergence between countries took place after 2005, that it is possible to reduce absolute inequality and to grow simultaneously, and that recently within-country net inequality has grown faster than market inequality. The main findings are preserved when different absolute decomposable inequality measures, sample sizes, and purchasing power parity exchange rates are used.

Several studies have recently found that world income inequality declined during the closing years of the twentieth century. However, these studies feature a number of shortcomings, including the use of outdated national income estimates to measure inequality between countries, as well as sparse data to capture the smaller (but growing) component found within countries. The current study addresses these concerns and offers new estimates of world income inequality based on 151 countries covering 95 percent of the world's population during the 1990–2008 period. Overall, the results are fairly compatible with prior efforts, lending greater confidence to earlier findings. Nevertheless, the results suggest that prior studies covering the 1990s overestimate the decline in between-country inequality, but underestimate the rise in within-country inequality. Consequently, total inequality did not begin to decline substantially until the post-2000 era. After presenting these estimates, I then examine factors associated with income mobility among the 15,100 subnational percentile groups in my data set. The results suggest that (a) the negative effect of inequality is larger than the positive effect of economic growth among the poorest 25 percent of the world's population, and (b) late industrialization has contributed to income convergence between countries, while economic globalization has primarily served to stretch income distributions within nations.

PKSG Working Paper, No. 1303 , 2013

Rising income inequality has recently moved into the centre of political and economic debates in line with increasing claims that a global rise in income inequality might have been a root cause of the subprime crisis. This paper provides an extensive overview of world scale developments in relative (i.e. proportional) income inequality to determine if the claims that the latter was high prior to the crisis are substantiated. The results of this study indicate that (i) non-population adjusted inequality between countries (inter-country inequality) increased between 1820 and the late 1990s but then decreased thereafter, while there was a steady decrease after the 1950s when population weights are taken into account; (ii) income inequality between ‘global citizens’ (global inequality) increased significantly between 1820 and 1950, while there was no clear trend thereafter; (iii) contemporary relative income inequality within countries (intra-country inequality) registered a clear upward trend on a global level since the 1980s.

2011

A new dataset for estimating the development of global inequality between 1820 and 2000 is presented, based on a large variety of sources and methods for estimating (gross household) income inequality. On this basis, and two sets of benchmarks for estimating between-country inequality (the Maddison 1990 benchmark and the recent 2005 ICP round), we estimate the evolution of global income inequality and of the number of people below various poverty lines over the past two centuries. We find that between 1820 and 1950 increasing per capita income is combined with increasing global inequality, and with an increase in the absolute number of people below the poverty line. After 1950 global inequality as measured by the Gini coefficient remains more or less constant, and also the number of poor starts to decline in absolute terms. It also appears that the global income distribution was uni-modal in the 19 th century, became increasingly bi-modal between 1910 and 1970 with two world wars, a depression and de-globalization, and was suddenly transformed back into a uni-modal distribution between 1980 and 2000.