Consistent, dense measures of inequality using grouped data: a global approach

This chapter summarizes a large body of research into the levels and evolution of economic inequality based on the application of the between-groups component of Theil’s T statistic to widely available grouped data, such as population and income by geographic region, or employment and average pay by sector or industry. Widespread application of this technique permits the development of dense and consistent measures of economic inequalities, including estimates of household gross income inequality, thus facilitating international and historical comparisons and integrating developed and developing countries into a single world system. Among other findings, the analysis shows that inequalities rose as part of a consistent global pattern from 1980 to 2000, indicating a common macroeconomic origin of the pressure on national income distributions, clearly driven by the financial crises and neoliberal policy regimes of the period.