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Global income distribution : from the fall of the Berlin Wall to the great recession
 
Author:Lakner, Christoph; Milanovic, Branko; Collection Title:Policy Research working paper ; no. WPS 6719
Country:World; Date Stored:2013/12/11
Document Date:2013/12/01Document Type:Policy Research Working Paper
Language:EnglishRegion:The World Region
Report Number:WPS6719SubTopics:Economic Theory & Research; Rural Poverty Reduction; Emerging Markets; Inequality; Poverty Impact Evaluation
Volume No:1 of 1  

Summary: 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.

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