The disturbing 'rise' of global income inequality

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Sala-i-Martin, Xavier. The disturbing 'rise' of global income inequality. 2001
http://hdl.handle.net/10230/524
To cite or link this document: http://hdl.handle.net/10230/524
dc.contributor.author Sala-i-Martin, Xavier
dc.contributor.other Universitat Pompeu Fabra. Departament d'Economia i Empresa
dc.date.issued 2001-08-01
dc.identifier.uri http://hdl.handle.net/10230/524
dc.description.abstract We use aggregate GDP data and within-country income shares for the period 1970-1998 to assign a level of income to each person in the world. We then estimate the gaussian kernel density function for the worldwide distribution of income. We compute world poverty rates by integrating the density function below the poverty lines. The $1/day poverty rate has fallen from 20% to 5% over the last twenty five years. The $2/day rate has fallen from 44% to 18%. There are between 300 and 500 million less poor people in 1998 than there were in the 70s. We estimate global income inequality using seven different popular indexes: the Gini coefficient, the variance of log-income, two of Atkinson’s indexes, the Mean Logarithmic Deviation, the Theil index and the coefficient of variation. All indexes show a reduction in global income inequality between 1980 and 1998. We also find that most global disparities can be accounted for by across-country, not within-country, inequalities. Within-country disparities have increased slightly during the sample period, but not nearly enough to offset the substantial reduction in across-country disparities. The across-country reductions in inequality are driven mainly, but not fully, by the large growth rate of the incomes of the 1.2 billion Chinese citizens. Unless Africa starts growing in the near future, we project that income inequalities will start rising again. If Africa does not start growing, then China, India, the OECD and the rest of middle-income and rich countries diverge away from it, and global inequality will rise. Thus, the aggregate GDP growth of the African continent should be the priority of anyone concerned with increasing global income inequality.
dc.language.iso eng
dc.relation.ispartofseries Economics and Business Working Papers Series; 616
dc.rights L'accés als continguts d'aquest document queda condicionat a l'acceptació de les condicions d'ús establertes per la següent llicència Creative Commons
dc.rights.uri http://creativecommons.org/licenses/by-nc-nd/3.0/es/
dc.title The disturbing 'rise' of global income inequality
dc.type info:eu-repo/semantics/workingPaper
dc.date.modified 2014-06-03T07:14:07Z
dc.subject.keyword Macroeconomics and International Economics
dc.subject.keyword income inequality
dc.subject.keyword poverty
dc.subject.keyword convergence
dc.subject.keyword growth
dc.rights.accessRights info:eu-repo/semantics/openAccess


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