IDEAS home Printed from https://ideas.repec.org/a/eee/streco/v70y2024icp45-55.html
   My bibliography  Save this article

Is the era of declining global income inequality over?

Author

Listed:
  • Kanbur, Ravi
  • Ortiz-Juarez, Eduardo
  • Sumner, Andy

Abstract

This paper examines the trajectory of global income inequality since 1981. Commonly used (relative) definitions indicate a decline in global inequality since the late 1980s. Looking ahead, it has been intuited that the influence of China's economic development—and that of other rapidly growing, populous nations—on the between-country component will, at some juncture, diminish and start to add to global inequality should economic growth persist. Our paper formalizes the turning point of global inequality through a simple model. For illustrative purposes, we empirically present the implications for the timing of the turning point in the context of a weaker post-pandemic growth recovery versus a stronger, albeit improbable, post-pandemic growth recovery. We conclude by arguing that the era of declining global income inequality is likely over, considering the forces influencing both the between-country and within-country components.

Suggested Citation

  • Kanbur, Ravi & Ortiz-Juarez, Eduardo & Sumner, Andy, 2024. "Is the era of declining global income inequality over?," Structural Change and Economic Dynamics, Elsevier, vol. 70(C), pages 45-55.
    • Handle: RePEc:eee:streco:v:70:y:2024:i:c:p:45-55
    DOI: 10.1016/j.strueco.2024.01.002
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0954349X2400002X
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.strueco.2024.01.002?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. François Bourguignon, 2015. "The Globalization of Inequality," Economics Books, Princeton University Press, edition 1, number 10433.
    2. Angus Deaton, 2005. "Measuring Poverty in a Growing World (or Measuring Growth in a Poor World)," The Review of Economics and Statistics, MIT Press, vol. 87(1), pages 1-19, February.
    3. Facundo Alvaredo & Anthony Atkinson & Lucas Chancel & Thomas Piketty & Emmanuel Saez & Gabriel Zucman, 2016. "Distributional National Accounts (DINA) Guidelines : Concepts and Methods used in WID.world," World Inequality Lab Working Papers halshs-02794308, HAL.
    4. World Bank, 2020. "Poverty and Shared Prosperity 2020," World Bank Publications - Books, The World Bank Group, number 34496.
    5. Sarah Dykstra, Benjamin Dykstra, and Justin Sandefur, 2014. "We Just Ran Twenty-Three Million Queries of the World Bank's Website - Working Paper 362," Working Papers 362, Center for Global Development.
    6. Dani Rodrik, 2014. "The Past, Present, and Future of Economic Growth," Challenge, Taylor & Francis Journals, vol. 57(3), pages 5-39.
    7. Angus Deaton & Salman Zaidi, 2002. "Guidelines for Constructing Consumption Aggregates for Welfare Analysis," World Bank Publications, The World Bank, number 14101, April.
    8. Christoph Lakner & Branko Milanovic, 2016. "Global Income Distribution: From the Fall of the Berlin Wall to the Great Recession," The World Bank Economic Review, World Bank, vol. 30(2), pages 203-232.
    9. Cinar Baymul & Kunal Sen, 2020. "Was Kuznets Right? New Evidence on the Relationship between Structural Transformation and Inequality," Journal of Development Studies, Taylor & Francis Journals, vol. 56(9), pages 1643-1662, July.
    10. Aziz Atamanov & Dean M. Jolliffe & Christoph Lakner & Espen Beer Prydz, 2018. "Purchasing Power Parities Used in Global Poverty Measurement," Global Poverty Monitoring Technical Note Series 5, The World Bank.
    11. Anand, Sudhir & Kanbur, S. M. R., 1993. "Inequality and development A critique," Journal of Development Economics, Elsevier, vol. 41(1), pages 19-43, June.
    12. Darvas, Zsolt, 2019. "Global interpersonal income inequality decline: The role of China and India," World Development, Elsevier, vol. 121(C), pages 16-32.
    13. Frederick Solt, 2016. "The Standardized World Income Inequality Database," Social Science Quarterly, Southwestern Social Science Association, vol. 97(5), pages 1267-1281, November.
    14. Carlos Gradín, 2021. "Trends in global inequality using a new integrated dataset," WIDER Working Paper Series wp-2021-61, World Institute for Development Economic Research (UNU-WIDER).
    15. Angus Deaton, 2005. "ERRATUM: Measuring Poverty in a Growing World (or Measuring Growth in a Poor World)," The Review of Economics and Statistics, MIT Press, vol. 87(2), pages 395-395, May.
    16. Dani Rodrik, 2016. "Premature deindustrialization," Journal of Economic Growth, Springer, vol. 21(1), pages 1-33, March.
    17. Frederick Solt, 2020. "Measuring Income Inequality Across Countries and Over Time: The Standardized World Income Inequality Database," Social Science Quarterly, Southwestern Social Science Association, vol. 101(3), pages 1183-1199, May.
    18. Miguel Niño‐Zarazúa & Laurence Roope & Finn Tarp, 2017. "Global Inequality: Relatively Lower, Absolutely Higher," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 63(4), pages 661-684, December.
    19. Joseph Connors & James Gwartney & Hugo Montesinos‐Yufa, 2020. "The rise and fall of worldwide income inequality, 1820–2035," Southern Economic Journal, John Wiley & Sons, vol. 87(1), pages 216-244, July.
    20. R. Andres Castaneda Aguilar & Christoph Lakner & Espen Beer Prydz & Jorge Soler Lopez & Ruoxuan Wu & Qinghua Zhao, 2019. "Estimating Global Poverty in Stata: The povcalnet command," Global Poverty Monitoring Technical Note Series 9, The World Bank.
    21. Anand, Sudhir & Kanbur, S. M. R., 1993. "The Kuznets process and the inequality--development relationship," Journal of Development Economics, Elsevier, vol. 40(1), pages 25-52, February.
    22. Angus Deaton, 2021. "COVID-19 and Global Income Inequality," NBER Working Papers 28392, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Christoph Lakner & Daniel Gerszon Mahler & Mario Negre & Espen Beer Prydz, 2022. "How much does reducing inequality matter for global poverty?," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 20(3), pages 559-585, September.
    2. Milanovic, Branko, 2024. "The three eras of global inequality, 1820–2020 with the focus on the past thirty years," World Development, Elsevier, vol. 177(C).
    3. Darvas, Zsolt, 2019. "Global interpersonal income inequality decline: The role of China and India," World Development, Elsevier, vol. 121(C), pages 16-32.
    4. Mathias Silva, 2023. "Parametric models of income distributions integrating misreporting and non-response mechanisms," AMSE Working Papers 2311, Aix-Marseille School of Economics, France.
    5. Brian A'Hearn & Nicola Amendola & Giovanni Vecchi, 2016. "On Historical Household Budgets," Rivista di storia economica, Società editrice il Mulino, issue 2, pages 137-176.
    6. Jordá, Vanesa & Niño-Zarazúa, Miguel, 2019. "Global inequality: How large is the effect of top incomes?," World Development, Elsevier, vol. 123(C), pages 1-1.
    7. La-Bhus Fah Jirasavetakul & Christoph Lakner, 2020. "The Distribution of Consumption Expenditure in Sub-Saharan Africa: The Inequality Among All Africans," Journal of African Economies, Centre for the Study of African Economies, vol. 29(1), pages 1-25.
    8. Martin Ravallion, 2022. "Missing Top Income Recipients," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 20(1), pages 205-222, March.
    9. Jaqueson K Galimberti & Stefan Pichler & Regina Pleninger, 2023. "Measuring Inequality Using Geospatial Data," The World Bank Economic Review, World Bank, vol. 37(4), pages 549-569.
    10. Thomas Goda & Santiago Sanchez, 2018. "Market and Disposable Top Income Shares adjusted by National Accounts Data," Journal of Income Distribution, Ad libros publications inc., vol. 26(2), pages 1-22, July.
    11. Guerriero, Arthur Zito & Kapeller, Jakob, 2024. "The global perspective on income inequality," ifso working paper series 35, University of Duisburg-Essen, Institute for Socioeconomics (ifso).
    12. Clare Leaver & Paul Segal, 2014. "The Global Distribution of Income," Economics Series Working Papers 714, University of Oxford, Department of Economics.
    13. Sanjay Reddy & Rahul Lahoti & Arjun Jayadev, 2015. "The global consumption and income project: An introduction and preliminary findings," WIDER Working Paper Series 003, World Institute for Development Economic Research (UNU-WIDER).
    14. Vladimir Hlasny & Paolo Verme, 2022. "The Impact of Top Incomes Biases on the Measurement of Inequality in the United States," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 84(4), pages 749-788, August.
    15. Gaurav Datt & Martin Ravallion & Rinku Murgai, 2020. "Poverty and Growth in India over Six Decades," American Journal of Agricultural Economics, John Wiley & Sons, vol. 102(1), pages 4-27, January.
    16. Vladimir Hlasny & Paolo Verme, 2018. "Top Incomes and Inequality Measurement: A Comparative Analysis of Correction Methods Using the EU SILC Data," Econometrics, MDPI, vol. 6(2), pages 1-21, June.
    17. Branko Milanovic, 2022. "After the Financial Crisis: The Evolution of the Global Income Distribution Between 2008 and 2013," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 68(1), pages 43-73, March.
    18. François Bourguignon, 2018. "Simple adjustments of observed distributions for missing income and missing people," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 16(2), pages 171-188, June.
    19. Grimm, Michael & Harttgen, Kenneth & Klasen, Stephan & Misselhorn, Mark, 2008. "A Human Development Index by Income Groups," World Development, Elsevier, vol. 36(12), pages 2527-2546, December.
    20. Gradín, Carlos, 2024. "Revisiting the trends in global inequality," World Development, Elsevier, vol. 179(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:streco:v:70:y:2024:i:c:p:45-55. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/525148 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.