Global income distribution: from the fall of the Berlin Wall to the great recession

Christoph Lakner and Branko Milanovic

No 6719, Policy Research Working Paper Series from The World Bank

Abstract: 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.

Keywords: Inequality; Economic Theory&Research; Poverty Impact Evaluation; Rural Poverty Reduction; Emerging Markets (search for similar items in EconPapers)
Date: 2013-12-01
New Economics Papers: this item is included in nep-dev
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Citations: View citations in EconPapers (151)

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Journal Article: Global Income Distribution: From the Fall of the Berlin Wall to the Great Recession (2016)
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