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Who drives inequality?

Author

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  • Moramarco, Domenico
  • Sterck, Olivier

Abstract

Which countries drive global inequality? Which states drive US inequality? We characterize the class of inequality measures that can answer these questions, permitting both an additive decomposition by subgroup and a multiplicative decomposition into within- and between-group components. Its central measure is simply the expected ratio of incomes between two randomly selected individuals. We show that global inequality fell since 1990, driven by declining disparities between countries. Inequality is primarily driven by large middle-income countries (India, China) and poor countries (Democratic Republic of Congo, Ethiopia). In the US, rising inequality is explained by widening gaps within states, while between-state inequality remains limited.

Suggested Citation

  • Moramarco, Domenico & Sterck, Olivier, 2027. "Who drives inequality?," Journal of Development Economics, Elsevier, vol. 184(C).
  • Handle: RePEc:eee:deveco:v:184:y:2027:i:c:s0304387826001653
    DOI: 10.1016/j.jdeveco.2026.103882
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    Keywords

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    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

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