OECD Economics Department Working Papers

Working papers from the Economics Department of the OECD that cover the full range of the Department’s work including the economic situation, policy analysis and projections; fiscal policy, public expenditure and taxation; and structural issues including ageing, growth and productivity, migration, environment, human capital, housing, trade and investment, labour markets, regulatory reform, competition, health, and other issues.

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The global income distribution for high-income countries

This paper presents the global income distribution between all individuals living in the developed world. Global inequality for the group of high-income countries, as measured by the Gini coefficient, stands at 37 in 2013 and has increased by almost 3 Gini points since the mid-1990s. This was mainly driven by top 10% incomes growing more than middle and lower incomes and the bottom 10% falling behind. Rising inequality within the United States drives almost half of the inequality increase among high-income countries, a combination of a sizeable rise in inequality and a population share around a third in the sample. The broad global middle in high-income countries, located from the 10th to the 90th percentile, experienced strikingly similar disposable income growth, but at a very slow annualised rate around 0.5%. Robustness analyses show that this low-growth result is sensitive to declining real incomes in Japan and that scaling micro-based incomes to national accounts means, to include in-kind transfers such as healthcare and educational services, lifts measured household income growth substantially. Finally, the paper delivers a methodological contribution by decomposing the global growth incidence curve into within- and between-country components, allowing for a more granular assessment of the development than is possible by decomposing inequality indices. The decomposition shows that between-country income differences contributed little to growing inequality in the group of high-income countries.


Keywords: between-country inequality, Global inequality, high-income countries, income distribution
JEL: F60: International Economics / Economic Impacts of Globalization / Economic Impacts of Globalization: General; D31: Microeconomics / Distribution / Personal Income, Wealth, and Their Distributions; D63: Microeconomics / Welfare Economics / Equity, Justice, Inequality, and Other Normative Criteria and Measurement
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