The Global Distribution of Income

Jul 2014 | 714

Authors: Clare Leaver, Paul Segal

This paper investigates recent advances in our understanding of the global distribution of income, and produces the first estimates of global inequality that take into account data on the incomes of the top one percent within countries.  We discuss conceptual and methodological issues - including alternative definitions of the global distribution, the use of household surveys and national accounts data, the use of purchasing power parity exchange rates, and the incorporation of recently available data on top incomes from income tax records.  We also review recent attempts to estimate the global distribution of income.  Our own estimates combine household survey data with top income data, and we analyze various aspects of this disribution, including its within- and between-country components, and changes in relative versus absolute global inequality.  Finally, we examine global poverty, which is identified through the lower end of the global distribution.

This paper appears in (Eds.) A. B. Atkinson and F. Bourguignon, Handbook of Income Distribution, Volume 2A, Elsevier, Amsterdam, 2015.

JEL Codes: D63, E01, I32

Keywords: global inequality, purchasing power parity exchange rates, household surveys, national accounts, top incomes, global poverty

View All Working Papers