Evolution of the Global
Income Inequality, 1970-2015
Yuri Dikhanov
World Bank
Présenté par:
Mr. Michel WARD
Expert des Nations Unies
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Global inequality consists of within-nation and
international components
Global distribution is based on 45 countries
representing 5/6 of population and income
Income from household surveys is augmented to
Personal Consumption Expenditures
National distributions converted using PPPs
Quasi-exact approximation of distribution f-n (with
cubic polynomials)
Assumptions for 2015


Growth rates from the 90s are maintained for
2000-2015 (except for Africa and Eastern
Europe)
National distributions are frozen at the 2000
level
VARIOUS GLOBAL INEQUALITY CHARACTERISTICS
changes
1970-80
198090
1990200
0
2000-15
1970-2000
cumul
ative
Gini-coefficient
0.014
0.004
-0.001
-0.031
0.016
Theil index 1
0.057
-0.032
-0.043
-0.109
-0.018
Theil index 2
0.040
0.030
0.021
-0.093
0.090
Income less than mean
0.010
0.023
0.027
-0.015
0.060
Decile ratio
11.30
0.19
-0.41
-7.87
11.08
1970
1980
1990
2000
2015
Gini-coefficient
0.668
0.681
0.685
0.684
0.653
Theil index 1
0.996
1.053
1.021
0.978
0.869
Theil index 2
0.822
0.862
0.891
0.912
0.819
Income less than mean
0.705
0.716
0.738
0.765
0.751
Decile ratio
92.28
103.58
103.77
103.36
95.49
absolute levels
100,000
Income Levels by Decile, 1970-2015
1999 PPP dollars
18,895
10,000
8,348
4,999
2,778
1,000
22,808
9,964
10,800
10,901
36,476
13,619
7,263
5,682
2,920
1,404
1,478
878
630
470
343
957
696
519
376
205
27,057
30,081
220
5,676
2,879
1,723
1,213
901
673
478
261
5,129
2,926
2,002
1,477
1,115
829
577
4,468
3,103
2,289
1,713
1,256
844
Decile 10
Decile 9
Decile 8
Decile 7
Decile 6
Decile 5
Decile 4
382
291
Decile 3
Decile 2
Decile 1
100
1970
1980
1990
2000
2015
Decomposition of inequality using Theil II index
1970
Within-country inequality
Between-country inequality
1980
1990
2000
2015
0.211
0.220
0.230
0.275
0.278
25.7%
25.5%
25.8%
30.2%
33.9%
0.610
0.642
0.661
0.637
0.541
74.3%
74.5%
74.2%
69.8%
66.1%
Density
WORLD INCOME DISTRIBUTION, 1970
0.400
0.350
0.300
SAS
POPULATION
0.250
AFR
0.200
0.150
ECE
0.100
EAP
OECD
(0.100)
LAC
(0.150)
(0.200)
ECE
(0.250)
INCOME
(0.300)
(0.350)
(0.400)
(0.450)
OECD
231,186
182,819
144,572
114,326
90,408
71,494
56,537
44,709
35,355
27,959
22,109
17,484
13,826
8,646
6,837
5,407
4,276
3,381
2,674
2,114
AFR
income in
1999 Int. Dollars
10,934
SAS
1,672
827
654
517
409
323
256
202
EAP
1,322
(0.050)
160
126
0.000
0.000
1,046
LAC
100
Density
0.050
Density
WORLD INCOME DISTRIBUTION, 2000
0.400
0.350
0.300
SAS
POPULATION
0.250
0.200
0.150
0.100
ECE
AFR
LAC
EAP
(0.100)
(0.200)
(0.250)
INCOME
(0.300)
(0.350)
(0.400)
SAS
OECD
AFR
231,186
182,819
90,408
71,494
56,537
44,709
35,355
27,959
22,109
17,484
13,826
8,646
6,837
5,407
LAC
ECE
(0.150)
10,934
(0.050)
4,276
3,381
EAP
2,674
2,114
1,672
1,322
827
1,046
654
517
409
323
256
202
160
126
100
Density
0.000
0.000
144,572
income in
1999 Int. Dollars
OECD
114,326
0.050
Density
WORLD INCOME DISTRIBUTION, 2015
0.400
0.350
0.300
SAS
POPULATION
0.250
0.200
LAC
0.150
ECE
0.100
EAP
(0.100)
(0.150)
(0.200)
(0.250)
INCOME
(0.300)
(0.350)
(0.400)
SAS AFR
OECD
LAC
ECE
231,186
182,819
90,408
71,494
56,537
44,709
35,355
27,959
22,109
17,484
13,826
8,646
6,837
5,407
4,276
3,381
2,674
2,114
1,672
1,322
827
654
517
409
323
256
202
1,046
EAP
10,934
(0.050)
160
126
0.000
0.000
144,572
income in
1999 Int. Dollars
OECD
114,326
AFR
100
Density
0.050
Regional composition of global income distribution, by
percentile, 1970
SAS
80%
ECE
AFR
60%
OECD
40%
EAP
LAC
20%
Percentiles of global income distribution
97%
94%
91%
88%
85%
82%
79%
76%
73%
70%
67%
64%
61%
58%
55%
52%
49%
46%
43%
40%
37%
34%
31%
28%
25%
22%
19%
16%
13%
10%
7%
4%
0%
1%
Regional composition of global percentiles
100%
Regional composition of global income distribution, by
percentile, 2000
SAS
80%
ECE
60%
AFR
OECD
LAC
40%
EAP
20%
Percentiles of global income distribution
97%
94%
91%
88%
85%
82%
79%
76%
73%
70%
67%
64%
61%
58%
55%
52%
49%
46%
43%
40%
37%
34%
31%
28%
25%
22%
19%
16%
13%
10%
7%
4%
0%
1%
Regional composition of global percentiles
100%
Regional composition of global income distribution, by
percentile, 2015
SAS
80%
ECE
60%
OECD
LAC
AFR
40%
EAP
20%
Percentiles of global income distribution
97%
94%
91%
88%
85%
82%
79%
76%
73%
70%
67%
64%
61%
58%
55%
52%
49%
46%
43%
40%
37%
34%
31%
28%
25%
22%
19%
16%
13%
10%
7%
4%
0%
1%
Regional composition of global percentiles
100%
0.40
0.35
Evolution of Global Income Distribution, 1970-2015, trace for each
percentile
2000
1970
0.30
2015
0.25
0.20
0.15
0.10
0.05
0.00
100
1,000
10,000
1999 PPP Dollars 100,000
50%
Income growth by percentile of global population, 1970-2015
40%
1980-70
1990-80
2000-90
2015-00
30%
20%
10%
-10%
-20%
percentile
97
93
89
85
81
77
73
69
65
61
57
53
49
45
41
37
33
29
25
21
17
13
9
5
1
0%
Regional income distributions:
example of Africa, 2000
(0.15)
(0.20)
(0.25)
(0.30)
(0.35)
(0.40)
1,000,000
100,000
10,000
(0.10)
1,000
(0.05)
100
0.40
0.35
0.30
0.25
0.20
0.15
0.10
0.05
-
Income transfer
Assumptions:
 Poverty gap 39% (20.6% of world population below
PPP $700)
 5% of the wealthiest transfer 2.8% of their total
income or 8.1% of marginal income (1.04% of world
income - $350 bln. in PPP terms or $150 bln. in
exchange rate terms) to cover the poverty gap;
 Transfer is made to the people below PPP $1,400,
with marginal rate 19.6%.
Income share: Decile 1
Decile 2
Decile 3
Decile 4
Decile 5
Decile 6
Decile 7
Decile 8
Decile 9
Decile 10
Upper boundary, decile 1
Upper boundary, decile 2
Upper boundary, decile 3
Upper boundary, decile 4
Median/Upper
boundary, decile 5
Upper boundary, decile
Upper boundary, decile
Upper boundary, decile
Upper boundary, decile
Upper boundary, decile
Gini-coefficient
Theil index
Theil index 2
Variance (std.)
Mode income
Mean Income
Income less than mean
Decile ratio
6
7
8
9
10
after
transfer
Characteristics
(estimation)
before
transfer
WORLD INCOME DISTRIBUTION, before and after a hypothetical income transfer
0.5%
1.0%
1.5%
2.1%
2.7%
3.7%
5.3%
9.2%
19.6%
54.3%
435
686
952
1,270
0.9%
1.4%
1.7%
2.2%
2.7%
3.7%
5.3%
9.2%
19.6%
53.3%
624
826
1,040
1,293
0.350
0.250
0.150
0.050
10
1,690
2,333
3,552
6,916
15,107
1,000,000
0.6825
0.9704
0.9066
1.9123
633
5371
0.7669
103.926
1,690
2,333
3,552
6,916
15,108
923,092
0.6652
0.8695
0.8623
1.8492
744
5371
0.7669
57.181
(0.150)
(0.250)
(0.350)
(0.450)
CONDITIONS
marginal reception rate
marginal surrender rate
100
(0.050)
19.6%
8.1%
for people below $1,400 threshold ($2-a-day)
for the richest 5%
Fx
Lx
Fx
Lx
1,000
10,000
100,000
1,000,000
Ends of the global distribution, before and after the
hypothetical transfer
0.150
0.450
0.050
0.350
10,000
100,000
1,000,000
(0.050)
0.250
0.150
(0.150)
0.050
(0.250)
100
(0.050)
1,000
10,000
Fx
Fx
(0.150)
(0.350)
Fx
Fx
Lx
Lx
(0.250)
Lx
Lx
(0.450)