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Is the era of declining global income inequality over?

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  • Kanbur, Ravi
  • Ortiz-Juarez, Eduardo
  • Sumner, Andy

Abstract

This paper examines the trajectory of global income inequality since 1981. Commonly used (relative) definitions indicate a decline in global inequality since the late 1980s. Looking ahead, it has been intuited that the influence of China's economic development—and that of other rapidly growing, populous nations—on the between-country component will, at some juncture, diminish and start to add to global inequality should economic growth persist. Our paper formalizes the turning point of global inequality through a simple model. For illustrative purposes, we empirically present the implications for the timing of the turning point in the context of a weaker post-pandemic growth recovery versus a stronger, albeit improbable, post-pandemic growth recovery. We conclude by arguing that the era of declining global income inequality is likely over, considering the forces influencing both the between-country and within-country components.

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  • Kanbur, Ravi & Ortiz-Juarez, Eduardo & Sumner, Andy, 2024. "Is the era of declining global income inequality over?," Structural Change and Economic Dynamics, Elsevier, vol. 70(C), pages 45-55.
    • Handle: RePEc:eee:streco:v:70:y:2024:i:c:p:45-55
    DOI: 10.1016/j.strueco.2024.01.002
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    2. Soto, Gonzalo H. & Martinez-Cobas, Xavier, 2025. "Energy poverty and the green energy transition's impact upon income inequality in Latin America," Structural Change and Economic Dynamics, Elsevier, vol. 72(C), pages 220-232.

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