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.
Details
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Author
Lakner, Christoph Milanovic, Branko
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Document Date
2013/12/01
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Document Type
Policy Research Working Paper
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Report Number
WPS6719
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Volume No
1
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Total Volume(s)
1
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Country
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Region
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Disclosure Date
2013/12/01
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Disclosure Status
Disclosed
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Doc Name
Global income distribution : from the fall of the Berlin Wall to the great recession
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Keywords
national account;household survey;consumption;global inequality;law of one price;average per capita income;change in income inequality;Poverty & Inequality;household final consumption expenditure;exchange rate;Exchange Rates;global distribution;national household survey;consumption survey;market exchange rate;domestic consumer price;social welfare function;global income inequality;cost of living;country of residence;place of residence;world income tax;household consumption expenditure;distribution of resource;country of residency;measured price level;economies of scale;terms of consumption;standard of living;constant local currency;measure of inequality;purchasing power parity;primarily due;household survey data;national income distribution;household income;
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Citation
Lakner, Christoph Milanovic, Branko
Global income distribution : from the fall of the Berlin Wall to the great recession (English). Policy Research working paper ; no. WPS 6719 Washington, D.C. : World Bank Group. http://documents.worldbank.org/curated/en/914431468162277879/Global-income-distribution-from-the-fall-of-the-Berlin-Wall-to-the-great-recession