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

By Christoph Lakner, Branko Milanovic. 2013

651 citations recorded by the source corpus.

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.

Subfields: Economics and Econometrics, Sociology and Political Science

View Paper: https://www.semanticscholar.org/paper/1309077750bb4d6db530986d545d42091c2b670a

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Citations in the corpus

Indian Income Inequality, 1922‐2015: From British Raj to Billionaire Raj? (2019, neutral): “We do not think that this factor alone can explain the entire gap, as it has been suggested (Lakner and Milanovic, 2015).”
Positional deprivation and support for radical right and radical left parties* (2018, background): “More broadly, Branko Milanovic’s study of global-level inequalities – allowing comparison of the poorest Indian with the richest American – included creation of the first-ever global growthincidence-curves of cross-centile real earnings for the whole world economy (Milanovic 2013; Lakner and Milanov”
Pareto Models, Top Incomes, and Recent Trends in UK Income Inequality (2017, neutral): “Subsequent applications include those by Alvaredo and Londoño Vélez (2015) and Diaz-Bazan (2015) to Colombia, and by Lakner and Milanovic (2016) and Anand and Segal (2016) to global income inequality.”
The Global Distribution of Income (2014, background): “We saw earlier that only three previous studies have used 2005 PPPs to estimate global inequality: Bourguignon (2011), Milanovic (2012), and Lakner and Milanovic (2013).”