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Extreme Inequality: Evidence from Brazil, India, the Middle East, and South Africa

Author

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  • Lydia Assouad
  • Lucas Chancel
  • Marc Morgan

Abstract

This paper presents new findings about inequality dynamics in Brazil, India, the Middle East, and South Africa from the World Inequality Database (WID.world). We combine tax data, household surveys, and national accounts in a systematic manner to produce estimates of the distribution of income, using concepts coherent with macroeconomic national accounts. We document an extreme level of inequality in these regions, with top 10 percent income shares above 50 percent of national income. These societies are characterized by a dual social structure, with an extremely rich group at the top, whose income levels are broadly comparable to their counterparts in high-income countries, and a much poorer mass of the population below top groups. We discuss the diversity of regional contexts and highlight two explanations for the levels observed: the historical legacy of social segregation and modern economic institutions and policies.

Suggested Citation

  • Lydia Assouad & Lucas Chancel & Marc Morgan, 2018. "Extreme Inequality: Evidence from Brazil, India, the Middle East, and South Africa," AEA Papers and Proceedings, American Economic Association, vol. 108, pages 119-123, May.
    • Handle: RePEc:aea:apandp:v:108:y:2018:p:119-23
    Note: DOI: 10.1257/pandp.20181076
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    Cited by:

    1. Amory Gethin & Marc Morgan, 2021. "Democracy and the Politicization of Inequality in Brazil, 1989-2018," Working Papers halshs-03165718, HAL.
    2. Rabah Arezki & Asif Islam & Grégoire Rota-Graziosi, 2021. "Working Paper 350 - Taming Private Leviathans: Regulation versus Taxation," Working Paper Series 2476, African Development Bank.
    3. Chancel, Lucas & Cogneau, Denis & Gethin, Amory & Myczkowski, Alix & Robilliard, Anne-Sophie, 2023. "Income inequality in Africa, 1990–2019: Measurement, patterns, determinants," World Development, Elsevier, vol. 163(C).
    4. Assouad, Lydia, 2023. "Rethinking the Lebanese economic miracle: the extreme concentration of income and wealth in Lebanon, 2005–2014," LSE Research Online Documents on Economics 117680, London School of Economics and Political Science, LSE Library.
    5. 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.
    6. Mehmet Balcilar & Rangan Gupta & Wei Ma & Philton Makena, 2021. "Income inequality and economic growth: A re‐examination of theory and evidence," Review of Development Economics, Wiley Blackwell, vol. 25(2), pages 737-757, May.
    7. Del Carmen,Giselle & Garriga,Santiago & Nuñez,Wilman & De Gouvea Scot de Arruda, Thiago, 2024. "Two Decades of Top Income Shares in Honduras," Policy Research Working Paper Series 10722, The World Bank.
    8. Del Carmen, Giselle & Garriga, Santiago & Ponce, Wilman & Scot, Thiago, 2025. "Two decades of top income shares in Honduras," Journal of Public Economics, Elsevier, vol. 246(C).
    9. Folharini, Saulo de Oliveira & Melo, Silas Nogueira de & Ramos, Rafael Guimarães & Brown, J. Christopher, 2023. "Land use and green crime: Assessing the edge effect," Land Use Policy, Elsevier, vol. 129(C).
    10. Giacomo DiPasquale, 2022. "The Effects of International Immigration on Inequality in Host Countries: the Case of Italy," Journal of International Migration and Integration, Springer, vol. 23(4), pages 1793-1824, December.
    11. Irarrázaval, Andrés, 2020. "The fiscal origins of comparative inequality levels: an empirical and historical investigation," Economic History Working Papers 107491, London School of Economics and Political Science, Department of Economic History.
    12. Anand Sahasranaman & Henrik Jeldtoft Jensen, 2021. "Dynamics of reallocation within India’s income distribution," Indian Economic Review, Springer, vol. 56(1), pages 1-23, June.
    13. Arezki,Rabah & Islam,Asif Mohammed & Rota-Graziosi,Gregoire, 2021. "Taming Private Leviathans : Regulation versus Taxation," Policy Research Working Paper Series 9531, The World Bank.
    14. Jonathan Rothwell, 2019. "The Political Economy of Inequality in Rich Democracies," LIS Working papers 772, LIS Cross-National Data Center in Luxembourg.
    15. Joel Henrique Ellwanger & Carlos Afonso Nobre & José Artur Bogo Chies, 2022. "Brazilian Biodiversity as a Source of Power and Sustainable Development: A Neglected Opportunity," Sustainability, MDPI, vol. 15(1), pages 1-16, December.
    16. Irarrázaval, Andrés, 2020. "The fiscal origins of comparative inequality levels: an empirical and historical investigation," LSE Research Online Documents on Economics 107491, London School of Economics and Political Science, LSE Library.
    17. Ram Singh, 2022. "Do the Wealthy Underreport their Income? Analysing Relationship between Wealth and Reported Income in India," Working papers 331, Centre for Development Economics, Delhi School of Economics.
    18. Bradlow, Benjamin H., 2024. "Urban social movements and local state capacity," World Development, Elsevier, vol. 173(C).
    19. Assouad, Lydia, 2023. "Rethinking the Lebanese economic miracle: The extreme concentration of income and wealth in Lebanon, 2005–2014," Journal of Development Economics, Elsevier, vol. 161(C).
    20. Anand Sahasranaman & Henrik Jeldtoft Jensen, 2019. "Dynamics of reallocation within India's income distribution," Papers 1909.04452, arXiv.org, revised Oct 2020.
    21. Giorgio d'Agostino & Francesco Giuli & Marco Lorusso & Margherita Scarlato, 2020. "Fiscal policy, labour market, and inequality: Diagnosing South Africa's anomalies in the shadow of racial discrimination," WIDER Working Paper Series wp-2020-122, World Institute for Development Economic Research (UNU-WIDER).
    22. Philip Arestis & Peter Phelps, 2019. "A panel analysis of Brazilian regional inequality," Environment and Planning A, , vol. 51(7), pages 1558-1585, October.

    More about this item

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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