Global earnings inequality down, within-country inequality increasing

2021-06-28

This article is published in The Economic Journal
Authors: Olle Hammar and Daniel Waldenström

  • Global earnings inequality has fallen, primarily during the 2000s and 2010s.
  • The earnings share of the world's poorest half has doubled.
  • Earnings inequalities between countries and within occupations have decreased.
  • Within-country earnings inequality has increased.

The image shows someone begging for money. They hold a sign that reads "I was once like you."

The study estimates trends in global earnings dispersion across occupational groups using a new database that covers 68 developed and developing countries between 1970 and 2018. The main findings are that global earnings inequality has fallen, primarily during the 2000s and 2010s, when the global Gini coefficient dropped by 15 points and the earnings share of the world's poorest half doubled. Decomposition analyses show earnings convergence between countries and within occupations, while within-country earnings inequality has increased. Moreover, the falling global inequality trend was driven by real wage growth, rather than changes in hours worked, taxes or occupational employment.

For more information about the study, please contact Olle Hammar: olle.hammar@nek.uu.se

Article: "Global Earnings Inequality, 1970-2018" published in The Economic Journal, Volume 130, Issue 632, November 2020, pages 2526-2545.

Last modified: 2021-09-20