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The Global Distribution of Income

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  • Clare Leaver
  • Paul Segal

Abstract

This paper investigates recent advances in our understanding of the global distribution of income, and produces the first estimates of global inequality that take into account data on the incomes of the top one percent within countries. We discuss conceptual and methodological issues - including alternative definitions of the global distribution, the use of household surveys and national accounts data, the use of purchasing power parity exchange rates, and the incorporation of recently available data on top incomes from income tax records. We also review recent attempts to estimate the global distribution of income. Our own estimates combine household survey data with top income data, and we analyze various aspects of this disribution, including its within- and between-country components, and changes in relative versus absolute global inequality. Finally, we examine global poverty, which is identified through the lower end of the global distribution.This paper appears in (Eds.) A. B. Atkinson and F. Bourguignon, Handbook of Income Distribution, Volume 2A, Elsevier, Amsterdam, 2015.

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  • Clare Leaver & Paul Segal, 2014. "The Global Distribution of Income," Economics Series Working Papers 714, University of Oxford, Department of Economics.
    • Handle: RePEc:oxf:wpaper:714
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    Cited by:

    1. Moatsos, Michail, 2020. "Global Absolute Poverty: The Evolution of its Measurement," EconStor Preprints 216642, ZBW - Leibniz Information Centre for Economics.
    2. Brandolini Andrea & Carta Francesca, 2016. "Some Reflections on the Social Welfare Bases of the Measurement of Global Income Inequality," Journal of Globalization and Development, De Gruyter, vol. 7(1), pages 1-15, June.
    3. Thomas Goda & Alejandro Torres, 2015. "Class or location? What explains the rising tide of absolute global income inequality during 1850-2010?," Documentos de Trabajo de Valor Público 12663, Universidad EAFIT.
    4. Soondong Hong & Heejoon Han & Chang Sik Kim, 2020. "World distribution of income for 1970–2010: dramatic reduction in world income inequality during the 2000s," Empirical Economics, Springer, vol. 59(2), pages 765-798, August.
    5. Rogelio Madrueño-Aguilar, 2017. "Global Income Distribution and the Middle-Income Strata: Implications for the World Development Taxonomy Debate," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 29(1), pages 1-18, January.
    6. La-Bhus Fah Jirasavetakul & Christoph Lakner, 2020. "The Distribution of Consumption Expenditure in Sub-Saharan Africa: The Inequality Among All Africans," Journal of African Economies, Centre for the Study of African Economies, vol. 29(1), pages 1-25.
    7. Thomas Goda & Alejandro Torres García, 2017. "The Rising Tide of Absolute Global Income Inequality During 1850–2010: Is It Driven by Inequality Within or Between Countries?," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 130(3), pages 1051-1072, February.
    8. Alex Cobham & Lukas Schlögl & Andy Sumner, 2016. "Inequality and the Tails: the Palma Proposition and Ratio," Global Policy, London School of Economics and Political Science, vol. 7(1), pages 25-36, February.
    9. Maurizio Franzini & Mario Pianta, 2015. "Four engines of inequality," LEM Papers Series 2015/20, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    10. Alex Cobham & Luke Schlogl & Andy Sumner, 2015. "Inequality and the Tails: The Palma Proposition and Ratio Revisited," Working Papers 143, United Nations, Department of Economics and Social Affairs.
    11. Amarante, Verónica & Galván, Marco & Mancero, Xavier, 2016. "Inequality in Latin America: a global measurement," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), April.
    12. Peter Edward & Andy Sumner, 2015. "New estimates of global poverty and inequality: How much difference do price data," Working Papers 365, ECINEQ, Society for the Study of Economic Inequality.
    13. 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.
    14. Andrew J. Hussey & Michael Jetter & Dianne McWilliam, 2021. "The Fundamental Determinants of Economic Inequality in Average Income Across Countries: The Declining Role of Political Institutions," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 67(1), pages 104-133, March.
    15. Andrew J. Hussey & Michael Jetter & Dianne McWilliam, 2017. "Explaining Inequality Between Countries: The Declining Role of Political Institutions," CESifo Working Paper Series 6320, CESifo.

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    More about this item

    Keywords

    global inequality; purchasing power parity exchange rates; household surveys; national accounts; top incomes; global poverty;
    All these keywords.

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • E01 - Macroeconomics and Monetary Economics - - General - - - Measurement and Data on National Income and Product Accounts and Wealth; Environmental Accounts
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty

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