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Global Earnings Inequality, 1970–2015

Author

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  • Hammar, Olle

    (Linnaeus University)

  • Waldenström, Daniel

    (Research Institute of Industrial Economics, Stockholm)

Abstract

We estimate trends in global earnings dispersion across occupational groups using a new database covering 66 developed and developing countries between 1970 and 2015. Our main finding is that global earnings inequality has declined, primarily during the 2000s, when the global Gini coefficient dropped nearly 10 points and the earnings share of the world's poorest half doubled. Decomposition analyses emphasize the role of income convergence between poor and rich countries and that earnings have become more similar within occupations in traded industries. Sensitivity checks show that the results are robust to varying real exchange rates, inequality measures and population definitions.

Suggested Citation

  • Hammar, Olle & Waldenström, Daniel, 2017. "Global Earnings Inequality, 1970–2015," IZA Discussion Papers 10762, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp10762
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    Cited by:

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    3. Holtemöller, Oliver & Pohle, Felix, 2020. "Employment effects of introducing a minimum wage: The case of Germany," Economic Modelling, Elsevier, vol. 89(C), pages 108-121.
    4. James K. Galbraith, 2019. "Sparse, Inconsistent and Unreliable: Tax Records and the World Inequality Report 2018," Development and Change, International Institute of Social Studies, vol. 50(2), pages 329-346, March.

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    More about this item

    Keywords

    global inequality; development; inequality decomposition; labor markets;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • F01 - International Economics - - General - - - Global Outlook
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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