Global Income Distribution: From the Fall of the Berlin Wall to the Great Recession

Abstract

We present an improved panel database of national household surveys between 1988 and 2008. In 2008, the global Gini index is around 70.5%, having declined by approximately 2 Gini points. China graduated from the bottom ranks, changing a twin-peaked global income distribution to a single-peaked one and creating an important global "median" class. 90% of the fastest growing country-deciles are from Asia, while almost 90% of the worst performers are from mature economies. Another "winner" was the global top 1%. Hence the global growth incidence curve has a distinct supine S shape, with gains highest around the median and top. JEL codes: D31 This paper provides new evidence on the evolution of global interpersonal income inequality between 1988 and 2008. We measure inequality among all individuals in the world irrespective of their country of residency thus implicitly assuming a "cosmopolitan" social welfare function (Atkinson and Brandolini 2010) and translating the concern for within-country inequality to the global level (Pogge 2002; Singer 2002). Over this period, the face of globalization changed dramatically with the end of the Soviet Union and the integration of many developing countries into the world economy. Our analysis of global

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