The Changing Shape of Global Inequality 1820–2000; Exploring a New Dataset

Abstract

A new dataset for charting the development of global inequality between 1820 and 2000 is presented, based on a large variety of sources and methods for estimating (gross household) income inequality. On this basis we estimate the evolution of global income inequality over the past two centuries. Two sets of benchmarks about between‐country inequality (the Maddison 1990 benchmark and the recent 2005 ICP round) are taken into account. We find that between 1820 and 1950, increasing per capita income is combined with increasing global inequality. After 1950, global inequality as measured by the Gini coefficient or the Theil index remains more or less constant. It also appears that the global income distribution was uni‐modal in the nineteenth century, became increasingly bi‐modal between 1910 and 1970 with two world wars, a depression and de‐globalization, and was suddenly transformed back into a uni‐modal distribution between 1980 and 2000.

The Development of Inequality and Poverty in Indonesia, 1932–2008

“…Few use comparable data to address long-run inequality and poverty trends in less developed countries (Banerjee and Piketty 2005;Bértola et al 2010;Leigh and Van der Eng 2010;Van Zanden et al 2014).…”

Global trends in relative and absolute income inequality

“…Existing studies that present longrun income inequality trends on a global scale either present relative (Bourguignon and Morrisson, 2002;Milanovic, 2005;van Zanden et al, 2014) or absolute estimates (Goda and Torres García, 2016). As such, this is the first study that contrasts changes in relative and absolute inequality between 1820 and 2010 to establish if these two measures have moved in the same or in opposing directions.…”

“…Lately there has emerged a substantial empirical literature about global inequality (e.g., Milanovic, 2005;Sala-i-Martin, 2006;Piketty, 2014;van Zanden et al, 2014), but this literature has a limitation in that it is focused on the Gini and Theil Indices, which both measure relative differences between incomes (i.e. ratios of incomes to the mean).…”

“…19101930195019601970198019851990199520002005van Zanden et al (2014 Sala-i-Martin (2006) Lakner & Milanovic (2013) Sub-Saharan Africa and South Asia are nearly the same as their market Gini values. In other words, these data reveal that some regions have relatively strong redistributive policies while others have not.…”

Income inequality, redistribution and the position of the decisive voter

“…2 The assumption of lognormality to model the income distribution is frequently made, e.g. by Chotikapanich et al (1997), Dikhanov and Ward (2002), Pinkovskiy and Sala-i-Martin (2009) and Van Zanden et al (2014). Third, we assume the tax-and-transfer system can be described by the combination of a flat earnings tax and a uniform lump sum grant, while in reality there are a variety of taxes, ranging from wealth to capital income, VAT and excise taxes with differentiated rates, and a variety of welfare benefits, ranging from social assistance to housing benefits.…”