Global Interpersonal Inequality: Trends and Measurement

Abstract

This paper discusses different approaches to the measurement of global interpersonal in equality. Trends in global interpersonal inequality during are measured using data from UNU-WIDER's World Income Inequality Database. In order to better understand the trends, global interpersonal inequality is decomposed into within-country and between-country inequality. The paper illustrates that the relationship between global interpersonal inequality and these constituent components is a complex one. In particular, we demonstrate that the changes in China s and India s income distributions over the past 30 years have simultaneously caused inequality to rise domestically in those countries, while tending to reduce global inter-personal inequality. In light of these findings, we reflect on the meaning and policy relevance of global vis-à-vis domestic inequality measures.Keywords: global interpersonal inequality, inequality, inequality measurement JEL classification: D31, D63, E01, O15 Acknowledgements: We are grateful to seminar participants at the universities of Helsinki, Oxford, Bielefeld, and Beijing Normal University, for their helpful comments on earlier versions of this paper. All the errors are ours. Global interpersonal inequality Trends and measurementMiguel Niño-Zarazúa y , Laurence Roope z and Finn Tarp x ABSTRACT This paper discusses di¤erent approaches to the measurement of global interpersonal inequality. Trends in global interpersonal inequality during 1975-2005 are measured using data from UNU-WIDER's World Income Inequality Database. In order to better understand the trends, global interpersonal inequality is decomposed into within-country and between-country inequality. The paper illustrates that the relationship between global interpersonal inequality and these constituent components is a complex one. In particular, we demonstrate that the changes in China's and India's income distributions over the past 30 years have simultaneously caused inequality to rise domestically in those countries, while tending to reduce global interpersonal inequality. In light of these …ndings, we re ‡ect on the meaning and policy relevance of global vis-à-vis domestic inequality measures.

Inequality in Latin America: A global measurement

“…More recent studies on global inequality in recent decades (Milanovic, 2012;Lakner and Milanovic, 2013;Niño-Zarazúa, Roope and Tarp, 2014;Anand and Segal, 2015) combine information from household surveys and consider quantiles of income distribution (usually ventiles) in each country, imputing the average per capita income to each quantile and constructing a database containing the quantiles of the world's different countries. 2 These studies all agree that the level of global inequality is very high, comparable indeed to that of the world's most unequal countries, and that it presents relatively minor variations over time.…”

Global Poverty and Inequality: Change and Continuity in Late Development

“…In sum: first, the thesis that global inequality is falling is dependent on China (a point raised by others and made systematically by Niño‐Zarazúa et al., ). Once China is removed, global inequality between countries in 2012/2015 is only slightly lower than in 1990.…”

“…Furthermore, even though the use of 2011 PPP generates lower levels of global inequality throughout the period, global inequality is still very high. 2 In sum: first, the thesis that global inequality is falling is dependent on China (a point raised by others and made systematically by Niño-Zarazúa et al, 2014). Once China is removed, global inequality between countries in 2012/2015 is only slightly lower than in 1990.…”

Measuring the labour income share of developing countries: Learning from social accounting matrices

“…In the recent past, inequality has increased within most countries, not only in high-income regions but also across the developing world (Atkinson and Bourguignon 2015;Goldberg and Pavcnik 2007;Niño-Zarazúa et al 2014;UNDP 2013 and others). Despite this worrying and serious development, we know far too little about inequality, its magnitude, causes, and consequences.…”