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

The paper presents a newly compiled and improved database of national household surveys between 1988 and 2008. In 2008, the global Gini index is around 70.5 percent having declined by approximately 2 Gini points over this twenty year period. When i...

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Bibliographic Details
Main Authors:	Lakner, Christoph, Milanovic, Branko
Format:	Policy Research Working Paper
Language:	English en_US
Published:	World Bank, Washington, DC 2014
Subjects:	AVERAGE ANNUAL AVERAGE GROWTH AVERAGE GROWTH RATE AVERAGE INCOME AVERAGE INCOMES BENCHMARK CAPITAL FLOWS COMMODITY COMPARATIVE ADVANTAGE CONSUMER PRICE INDICES CONSUMER PRICE INFLATION CONSUMERS CONSUMPTION GROWTH COUNTERFACTUAL CPI CROSS-COUNTRY COMPARISONS CUMULATIVE POPULATION CURRENCY DATA SET DATA SETS DEVELOPING COUNTRIES DEVELOPMENT POLICY DISPOSABLE INCOME DISTRIBUTION OF INCOME DISTRIBUTION OF INCOMES DISTRIBUTIONAL CHANGE DISTRIBUTIONAL DATA DOMESTIC PRICES ECONOMIC GROWTH ECONOMIC OUTLOOK ECONOMIES OF SCALE EMPIRICAL EVIDENCE EMPIRICAL WORK EXCHANGE RATE EXCHANGE RATES FINANCIAL SERVICES FOREIGN AID FUNCTIONAL FORM GDP GDP PER CAPITA GINI COEFFICIENT GINI INDEX GLOBAL POVERTY GLOBALIZATION GOVERNMENT BONDS GROUP INEQUALITIES GROWTH RATE GROWTH RATES HIGHER INEQUALITY HOUSEHOLD CONSUMPTION HOUSEHOLD INCOME HOUSEHOLD SIZE HOUSEHOLD SURVEY HOUSEHOLD SURVEY DATA HOUSEHOLD SURVEYS INCOME INCOME CONVERGENCE INCOME DATA INCOME DISTRIBUTION INCOME DISTRIBUTIONS INCOME GAINS INCOME GROUP INCOME GROUPS INCOME GROWTH INCOME INEQUALITY INCOME LEVEL INCOME LEVELS INCOME SHARES INCOME STUDY INCOME TAX INCOMES INCREASING INEQUALITY INDIVIDUAL COUNTRIES INDIVIDUAL INCOMES INEQUALITY INEQUALITY AVERSION INEQUALITY MEASURES JURISDICTION LOCAL CURRENCIES LOCAL CURRENCY LORENZ CURVE LOW INCOMES MEAN INCOME MEAN INCOMES MEAN LOG DEVIATION MEASUREMENT ERRORS MEDIAN INCOME NATIONAL INCOME NATIONAL SURVEYS NOMINAL INCOMES 0 HYPOTHESIS OBSERVED CHANGES OVERVALUATION PARTICULAR COUNTRY PER CAPITA INCOME PER CAPITA INCOMES POLICY DISCUSSIONS POLICY RESEARCH POOR POOR AREAS POOR COUNTRIES POOR COUNTRY POPULATION SHARE POVERTY MEASUREMENT POWER PARITIES PRICE LEVELS PRIVATE CONSUMPTION PURCHASING POWER REAL INCOME REGIONAL COVERAGE REGIONAL INEQUALITY RESIDUAL INEQUALITY RURAL RURAL AREAS RURAL POPULATION SAVINGS SOCIAL PROTECTION SURVEY DESIGN TROUGH WORLD DEVELOPMENT INDICATORS WORLD ECONOMIES WORLD ECONOMY
Online Access:	http://documents.worldbank.org/curated/en/2013/12/18633621/global-income-distribution-fall-berlin-wall-great-recession http://hdl.handle.net/10986/16935

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Summary:	The paper presents a newly compiled and improved database of national household surveys between 1988 and 2008. In 2008, the global Gini index is around 70.5 percent having declined by approximately 2 Gini points over this twenty year period. When it is adjusted for the likely under-reporting of top incomes in surveys by using the gap between national accounts consumption and survey means in combination with a Pareto-type imputation of the upper tail, the estimate is a much higher global Gini of almost 76 percent. With such an adjustment the downward trend in the Gini almost disappears. Tracking the evolution of individual country-deciles shows the underlying elements that drive the changes in the global distribution: China has graduated from the bottom ranks, modifying the overall shape of the global income distribution in the process and creating an important global "median" class that has transformed a twin-peaked 1988 global distribution into an almost single-peaked one now. The "winners" were country-deciles that in 1988 were around the median of the global income distribution, 90 percent of whom in terms of population are from Asia. The "losers" were the country-deciles that in 1988 were around the 85th percentile of the global income distribution, almost 90 percent of whom in terms of population are from mature economies.

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

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