Global Distributions of Capital and Labor Incomes

Marco Ranaldi

World Development, 2025, vol. 188, issue C

Abstract: This article studies the global distributions of capital and labor incomes among individuals in 2000 and 2016. By constructing a novel database covering approximately 80% of the global output and 60% of the world population, two major findings stand out. First, the world underwent an important process of capitalization. The share of world individuals with positive capital income rose from 20% to 32%. Second, the global middle class benefited the most, in relative terms, from such a capitalization process, with China being the main driver of this global trend. The findings of this paper are robust to changes in the income definition, top-income and functional income distribution adjustments. The global composition of capital and labor incomes is more equal today than it was twenty years ago.

Keywords: Global inequality; Capital and labor; Compositional inequality (search for similar items in EconPapers)
JEL-codes: D31 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:wdevel:v:188:y:2025:i:c:s0305750x2400319x

DOI: 10.1016/j.worlddev.2024.106849

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