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Who are the Global Top 1%?

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  • Sudhir Anand
  • Paul Segal

Abstract

The rise of the ‘emerging economies’ is leading to historically-unprecedented shifts in the global economy. While its implications for global poverty and the rise of a global ‘middle class’ have been documented, we present the first in-depth analysis of the changing composition of the global rich and the rising representation of developing countries at the top of the global distribution. We do so by constructing global distributions of income between 1988 and 2012 based on both household surveys and the new top incomes data derived from tax records, in order to capture the rich who are typically excluded from household surveys. We find that the representation of developing countries in the global top 1% declined until about 2002, but since 2005 it has risen significantly. This coincides with a salient decline in global inequality since 2005, according to a range of measures. We compare our estimates of the country-composition and income levels of the global rich with a number of other sources – including Credit Suisse’s estimates of global wealth, the Forbes World Billionaires List, attendees of the World Economic Forum, and estimates of top executives’ salaries. To varying degrees, all show a rise in the representation of the developing world in the ranks of the global élite.

Suggested Citation

  • Sudhir Anand & Paul Segal, 2016. "Who are the Global Top 1%?," Economics Series Working Papers 799, University of Oxford, Department of Economics.
  • Handle: RePEc:oxf:wpaper:799
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    File URL: http://www.economics.ox.ac.uk/materials/papers/14549/paper-799-final.pdf
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    References listed on IDEAS

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    1. François Bourguignon, 2015. "The Globalization of Inequality," Economics Books, Princeton University Press, edition 1, number 10433, September.
    2. Anthony B. Atkinson & Thomas Piketty & Emmanuel Saez, 2011. "Top Incomes in the Long Run of History," Journal of Economic Literature, American Economic Association, vol. 49(1), pages 3-71, March.
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    4. Roine, Jesper & Waldenström, Daniel, 2014. "Long run trends in the distribution of income and wealth," Working Paper Series, Center for Fiscal Studies 2014:5, Uppsala University, Department of Economics.
    5. Arjun Jayadev & Rahul Lahoti & Sanjay Reddy, 2015. "The Middle Muddle: Conceptualizing and Measuring the Global Middle Class," Courant Research Centre: Poverty, Equity and Growth - Discussion Papers 193, Courant Research Centre PEG.
    6. François Bourguignon & Christian Morrisson, 2002. "Inequality Among World Citizens: 1820-1992," American Economic Review, American Economic Association, vol. 92(4), pages 727-744, September.
    7. Christoph Lakner & Branko Milanovic, 2016. "Global Income Distribution: From the Fall of the Berlin Wall to the Great Recession," World Bank Economic Review, World Bank Group, vol. 30(2), pages 203-232.
    8. Branko Milanovic, 2012. "Global inequality recalculated and updated: the effect of new PPP estimates on global inequality and 2005 estimates," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 10(1), pages 1-18, March.
    9. Morten Jerven, 2013. "Comparability of GDP estimates in Sub-Saharan Africa: The effect of Revisions in Sources and Methods Since Structural Adjustment," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 59, pages 16-36, October.
    10. Angus Deaton & Bettina Aten, 2017. "Trying to Understand the PPPs in ICP 2011: Why Are the Results So Different?," American Economic Journal: Macroeconomics, American Economic Association, vol. 9(1), pages 243-264, January.
    11. Marcio Jose Vargas Da Cruz & James Foster & Bryce Quillin & Philip Schellekens, 2015. "Ending Extreme Poverty and Sharing Prosperity: Progress and Policies," Policy Research Notes (PRNs) 101740, The World Bank.
    12. Sudhir Anand & Paul Segal, 2008. "What Do We Know about Global Income Inequality?," Journal of Economic Literature, American Economic Association, vol. 46(1), pages 57-94, March.
    13. Atkinson, Anthony B., 2015. "Inequality: what can be done?," LSE Research Online Documents on Economics 101810, London School of Economics and Political Science, LSE Library.
    14. Homi Kharas, 2010. "The Emerging Middle Class in Developing Countries," OECD Development Centre Working Papers 285, OECD Publishing.
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    Cited by:

    1. Iftekhar Hasan & Roman Horvath & Jan Mares, 2018. "Finance and Wealth Inequality," Working Papers 378, Leibniz Institut für Ost- und Südosteuropaforschung (Institute for East and Southeast European Studies).
    2. repec:bla:devchg:v:50:y:2019:i:2:p:410-425 is not listed on IDEAS
    3. Sean Higgins & Nora Lustig & Andrea Vigorito, 2018. "The Rich Underreport their Income: Assessing Bias in Inequality Estimates and Correction Methods using Linked Survey and Tax Data," Working Papers 1808, Tulane University, Department of Economics.
    4. begard Iversen & Anirudh Krishna & Kunal Sen, 2017. "Beyond poverty escapes – social mobility in the Global South: A survey article," Global Development Institute Working Paper Series 172017, GDI, The University of Manchester.
    5. Vladimir Hlasny, 2019. "Redistributive Impacts of Fiscal Policies in Mexico: Corrections for Top Income Measurement Problems," LIS Working papers 765, LIS Cross-National Data Center in Luxembourg.
    6. Ravallion Martin, 2018. "What might explain today’s conflicting narratives on global inequality?," WIDER Working Paper Series 141, World Institute for Development Economic Research (UNU-WIDER).
    7. repec:bla:devchg:v:50:y:2019:i:2:p:347-378 is not listed on IDEAS

    More about this item

    Keywords

    top incomes; global top 1 percent; global inequality; extreme wealth;

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries

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