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Wealth inequality and economic growth: Evidence from the World Inequality Database

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  • Steenbrink, Rachel
  • Skali, Ahmed

Abstract

Although it is often argued that wealth inequality matters more for economic growth than income inequality, this relationship has rarely been studied empirically, with a few exceptions covering a very restricted country sample or short timeframe. Leveraging hitherto unexploited wealth inequality data from the World Inequality Database, covering a panel of 165 countries between 1995 and 2019, we document a negative and statistically significant relationship between wealth inequality and economic growth. A one standard deviation increase in the wealth Gini coefficient within countries is associated with a 0.34 percentage points decline in growth rates. Instrumental variables support a causal interpretation of the results. The results survive a large battery of robustness checks, and we find no evidence to suggest a heterogeneous relationship.

Suggested Citation

  • Steenbrink, Rachel & Skali, Ahmed, 2026. "Wealth inequality and economic growth: Evidence from the World Inequality Database," World Development, Elsevier, vol. 199(C).
    • Handle: RePEc:eee:wdevel:v:199:y:2026:i:c:s0305750x25003365
    DOI: 10.1016/j.worlddev.2025.107250
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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
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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