IDEAS home Printed from https://ideas.repec.org/a/oup/wbecrv/v30y2016i2p203-232..html
   My bibliography  Save this article

Global Income Distribution: From the Fall of the Berlin Wall to the Great Recession

Author

Listed:
  • Christoph Lakner
  • Branko Milanovic

Abstract

We present an improved panel database of national household surveys between 1988 and 2008. In 2008, the global Gini index is around 70.5%, having declined by approximately 2 Gini points. China graduated from the bottom ranks, changing a twin-peaked global income distribution to a single-peaked one and creating an important global "median" class. 90% of the fastest growing country-deciles are from Asia, while almost 90% of the worst performers are from mature economies. Another "winner" was the global top 1%. Hence the global growth incidence curve has a distinct supine S shape, with gains highest around the median and top.

Suggested Citation

  • Christoph Lakner & Branko Milanovic, 2016. "Global Income Distribution: From the Fall of the Berlin Wall to the Great Recession," The World Bank Economic Review, World Bank, vol. 30(2), pages 203-232.
    • Handle: RePEc:oup:wbecrv:v:30:y:2016:i:2:p:203-232.
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1093/wber/lhv039
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Vladimir Hlasny & Paolo Verme, 2018. "Top Incomes and the Measurement of Inequality in Egypt," The World Bank Economic Review, World Bank, vol. 32(2), pages 428-455.
    2. Atkinson, A. B. & Piketty, Thomas (ed.), 2010. "Top Incomes: A Global Perspective," OUP Catalogue, Oxford University Press, number 9780199286898.
    3. Branko Milanovic, 2002. "True World Income Distribution, 1988 and 1993: First Calculation Based on Household Surveys Alone," Economic Journal, Royal Economic Society, vol. 112(476), pages 51-92, January.
    4. Van Kerm, Philippe, 2009. "Income mobility profiles," Economics Letters, Elsevier, vol. 102(2), pages 93-95, February.
    5. Richard Burkhauser & Shuaizhang Feng & Stephen Jenkins & Jeff Larrimore, 2009. "Recent Trends in Top Income Shares in the USA: Reconciling Estimates from March CPS and IRS Tax Return Data," Working Papers 09-26, Center for Economic Studies, U.S. Census Bureau.
    6. Dirk Krueger & Fabrizio Perri, 2006. "Does Income Inequality Lead to Consumption Inequality? Evidence and Theory -super-1," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 73(1), pages 163-193.
    7. Angus Deaton, 2005. "Measuring Poverty in a Growing World (or Measuring Growth in a Poor World)," The Review of Economics and Statistics, MIT Press, vol. 87(1), pages 1-19, February.
    8. George Alessandria & Joseph P. Kaboski, 2011. "Pricing-to-Market and the Failure of Absolute PPP," American Economic Journal: Macroeconomics, American Economic Association, vol. 3(1), pages 91-127, January.
    9. Shaohua Chen & Martin Ravallion, 2004. "How Have the World's Poorest Fared since the Early 1980s?," The World Bank Research Observer, World Bank, vol. 19(2), pages 141-169.
    10. Rao, Vijayendra, 2000. "Price Heterogeneity and "Real" Inequality: A Case Study of Prices and Poverty in Rural South India," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 46(2), pages 201-211, June.
    11. Angus Deaton & Olivier Dupriez, 2011. "Purchasing Power Parity Exchange Rates for the Global Poor," American Economic Journal: Applied Economics, American Economic Association, vol. 3(2), pages 137-166, April.
    12. Angus Deaton & Alan Heston, 2010. "Understanding PPPs and PPP-Based National Accounts," American Economic Journal: Macroeconomics, American Economic Association, vol. 2(4), pages 1-35, October.
    13. Pinkovskiy, Maxim L., 2013. "World welfare is rising: Estimation using nonparametric bounds on welfare measures," Journal of Public Economics, Elsevier, vol. 97(C), pages 176-195.
    14. Frankel, David M. & Gould, Eric D., 2001. "The Retail Price of Inequality," Journal of Urban Economics, Elsevier, vol. 49(2), pages 219-239, March.
    15. Anand, Sudhir & Segal, Paul & Stiglitz, Joseph E. (ed.), 2010. "Debates on the Measurement of Global Poverty," OUP Catalogue, Oxford University Press, number 9780199558049.
    16. Angus Deaton, 2005. "ERRATUM: Measuring Poverty in a Growing World (or Measuring Growth in a Poor World)," The Review of Economics and Statistics, MIT Press, vol. 87(2), pages 395-395, May.
    17. Carr-Hill, Roy, 2013. "Missing Millions and Measuring Development Progress," World Development, Elsevier, vol. 46(C), pages 30-44.
    18. Cowell, Frank A. & Flachaire, Emmanuel, 2007. "Income distribution and inequality measurement: The problem of extreme values," Journal of Econometrics, Elsevier, vol. 141(2), pages 1044-1072, December.
    19. Frank A. Cowell, 2008. "Income Distribution and Inequality," Chapters, in: John B. Davis & Wilfred Dolfsma (ed.), The Elgar Companion to Social Economics, chapter 13, Edward Elgar Publishing.
    20. Richard V. Burkhauser & Shuaizhang Feng & Stephen P. Jenkins & Jeff Larrimore, 2012. "Recent Trends in Top Income Shares in the United States: Reconciling Estimates from March CPS and IRS Tax Return Data," The Review of Economics and Statistics, MIT Press, vol. 94(2), pages 371-388, May.
    21. Jonathan D. Fisher & David S. Johnson & Timothy M. Smeeding, 2013. "Measuring the Trends in Inequality of Individuals and Families: Income and Consumption," American Economic Review, American Economic Association, vol. 103(3), pages 184-188, May.
    22. Mistiaen, Johan A. & Ravallion, Martin, 2003. "Survey compliance and the distribution of income," Policy Research Working Paper Series 2956, The World Bank.
    23. Leigh, Andrew & van der Eng, Pierre, 2009. "Inequality in Indonesia: What can we learn from top incomes?," Journal of Public Economics, Elsevier, vol. 93(1-2), pages 209-212, February.
    24. Kopczuk, Wojciech & Slemrod, Joel & Yitzhaki, Shlomo, 2005. "The limitations of decentralized world redistribution: An optimal taxation approach," European Economic Review, Elsevier, vol. 49(4), pages 1051-1079, May.
    25. Sudhir Anand & Paul Segal, 2008. "What Do We Know about Global Income Inequality?," Journal of Economic Literature, American Economic Association, vol. 46(1), pages 57-94, March.
    26. Anthony B. Atkinson & Andrea Brandolini, 2010. "On Analyzing the World Distribution of Income," The World Bank Economic Review, World Bank, vol. 24(1), pages 1-37, January.
    27. François Bourguignon & Christian Morrisson, 2002. "Inequality Among World Citizens: 1820-1992," American Economic Review, American Economic Association, vol. 92(4), pages 727-744, September.
    28. Segal, Paul, 2011. "Resource Rents, Redistribution, and Halving Global Poverty: The Resource Dividend," World Development, Elsevier, vol. 39(4), pages 475-489, April.
    29. Ms. Camelia Minoiu & Sanjay Reddy, 2008. "Kernel Density Estimation Based on Grouped Data: The Case of Poverty Assessment," IMF Working Papers 2008/183, International Monetary Fund.
    30. Anthony Atkinson & Thomas Piketty, 2010. "Top Incomes : A Global Perspective," PSE-Ecole d'économie de Paris (Postprint) halshs-00754875, HAL.
    31. Karen E. Dynan & Jonathan Skinner & Stephen P. Zeldes, 2004. "Do the Rich Save More?," Journal of Political Economy, University of Chicago Press, vol. 112(2), pages 397-444, April.
    32. Pinelopi Koujianou Goldberg & Nina Pavcnik, 2007. "Distributional Effects of Globalization in Developing Countries," Journal of Economic Literature, American Economic Association, vol. 45(1), pages 39-82, March.
    33. Branko Milanovic, 2012. "Global inequality recalculated and updated: the effect of new PPP estimates on global inequality and 2005 estimates," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 10(1), pages 1-18, March.
    34. Martin Ravallion, 2010. "Understanding PPPs and PPP-Based National Accounts: Comment," American Economic Journal: Macroeconomics, American Economic Association, vol. 2(4), pages 46-52, October.
    35. Anton Korinek & Johan Mistiaen & Martin Ravallion, 2006. "Survey nonresponse and the distribution of income," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 4(1), pages 33-55, April.
    36. Atkinson, Anthony B., 1970. "On the measurement of inequality," Journal of Economic Theory, Elsevier, vol. 2(3), pages 244-263, September.
    37. Michael Grimm, 2007. "Removing the anonymity axiom in assessing pro-poor growth," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 5(2), pages 179-197, August.
    38. Philip Armour & Richard V. Burkhauser & Jeff Larrimore, 2013. "Deconstructing Income and Income Inequality Measures: A Crosswalk from Market Income to Comprehensive Income," American Economic Review, American Economic Association, vol. 103(3), pages 173-177, May.
    39. Robert Ackland & Steve Dowrick & Benoit Freyens, 2013. "Measuring Global Poverty: Why PPP Methods Matter," The Review of Economics and Statistics, MIT Press, vol. 95(3), pages 813-824, July.
    40. Jonathan Haskel & Robert Z. Lawrence & Edward E. Leamer & Matthew J. Slaughter, 2012. "Globalization and U.S. Wages: Modifying Classic Theory to Explain Recent Facts," Journal of Economic Perspectives, American Economic Association, vol. 26(2), pages 119-140, Spring.
    41. Anthony Atkinson & Thomas Piketty, 2007. "Top incomes over the twentieth century: A contrast between continental european and english-speaking countries," Post-Print halshs-00754859, HAL.
    42. Jagdish N. Bhagwati, 2004. "In Defense of Globalization: It Has a Human Face," Rivista di Politica Economica, SIPI Spa, vol. 94(6), pages 9-20, November-.
    43. Ravallion, Martin & Chen, Shaohua, 2003. "Measuring pro-poor growth," Economics Letters, Elsevier, vol. 78(1), pages 93-99, January.
    44. Atkinson, A. B. & Piketty, Thomas (ed.), 2007. "Top Incomes Over the Twentieth Century: A Contrast Between Continental European and English-Speaking Countries," OUP Catalogue, Oxford University Press, number 9780199286881.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Christoph Lakner & Branko Milanovic, 2015. "La distribución global del ingreso. De la caída del muro de Berlín a la gran recesión," Revista de Economía Institucional, Universidad Externado de Colombia - Facultad de Economía, vol. 17(32), pages 71-128, January-J.
    2. Facundo Alvaredo & Leonardo Gasparini, 2013. "Recent Trends in Inequality and Poverty in Developing Countries," CEDLAS, Working Papers 0151, CEDLAS, Universidad Nacional de La Plata.
    3. Clare Leaver & Paul Segal, 2014. "The Global Distribution of Income," Economics Series Working Papers 714, University of Oxford, Department of Economics.
    4. Nora Lustig, 2020. "The ``missing rich'' in household surveys: causes and correction approaches," Working Papers 520, ECINEQ, Society for the Study of Economic Inequality.
    5. Nora Lustig, 2019. "The “Missing Rich” in Household Surveys: Causes and Correction Approaches," Commitment to Equity (CEQ) Working Paper Series 75, Tulane University, Department of Economics.
    6. Jordá, Vanesa & Niño-Zarazúa, Miguel, 2019. "Global inequality: How large is the effect of top incomes?," World Development, Elsevier, vol. 123(C), pages 1-1.
    7. Vladimir Hlasny & Paolo Verme, 2022. "The Impact of Top Incomes Biases on the Measurement of Inequality in the United States," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 84(4), pages 749-788, August.
    8. Rafael Carranza & Marc Morgan & Brian Nolan, 2023. "Top Income Adjustments and Inequality: An Investigation of the EU‐SILC," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 69(3), pages 725-754, September.
    9. Diego Winkelried & Bruno Escobar, 2022. "Declining inequality in Latin America? Robustness checks for Peru," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 20(1), pages 223-243, March.
    10. Nora Lustig, 2018. "Measuring the Distribution of Household Income, Consumption and Wealth: State of Play and Measurement Challenges," Working Papers 1801, Tulane University, Department of Economics.
    11. Pinkovskiy, Maxim L., 2013. "World welfare is rising: Estimation using nonparametric bounds on welfare measures," Journal of Public Economics, Elsevier, vol. 97(C), pages 176-195.
    12. Brzezinski, Michal, 2013. "Asymptotic and bootstrap inference for top income shares," Economics Letters, Elsevier, vol. 120(1), pages 10-13.
    13. Raymundo M. Campos-Vazquez & Emmanuel Chavez & Gerardo Esquivel, 2016. "Estimating top income shares without tax return data: Mexico since the 1990s," Serie documentos de trabajo del Centro de Estudios Económicos 2016-04, El Colegio de México, Centro de Estudios Económicos.
    14. François Bourguignon, 2018. "Simple adjustments of observed distributions for missing income and missing people," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 16(2), pages 171-188, June.
    15. Branko Milanovic, 2014. "The Return of "Patrimonial Capitalism": A Review of Thomas Piketty's Capital in the Twenty-First Century," Journal of Economic Literature, American Economic Association, vol. 52(2), pages 519-534, June.
    16. Brian A'Hearn & Nicola Amendola & Giovanni Vecchi, 2016. "On Historical Household Budgets," Rivista di storia economica, Società editrice il Mulino, issue 2, pages 137-176.
    17. Anand, Sudhir & Segal, Paul, 2017. "Who Are the Global Top 1%?," World Development, Elsevier, vol. 95(C), pages 111-126.
    18. Dhongde, Shatakshee & Minoiu, Camelia, 2013. "Global Poverty Estimates: A Sensitivity Analysis," World Development, Elsevier, vol. 44(C), pages 1-13.
    19. Salvatore Morelli & Timothy Smeeding & Jeffrey Thompson, 2014. "Post-1970 Trends in Within-Country Inequality and Poverty: Rich and Middle Income Countries," CSEF Working Papers 356, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
    20. Xavier Jara & Nicolás Oliva, 2018. "Top income adjustments and tax reforms in Ecuador," WIDER Working Paper Series wp-2018-165, World Institute for Development Economic Research (UNU-WIDER).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:oup:wbecrv:v:30:y:2016:i:2:p:203-232.. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Oxford University Press (email available below). General contact details of provider: https://edirc.repec.org/data/wrldbus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.