Mar 19, 20 theres one measure of inequality that gets all the attention the gini index. Across countries, this relation is meaningfully positive only for countries with per capita incomes below roughly half those in the developed world. The effects of income inequality on economic growth. Many emerging countries, especially china, have caught up with the developed world in the course of globalisation. Incomes are more equally distributed and fewer people are poor where social spending is high. The gini index was developed by gini, 1912, and it is strictly linked to the representation of income inequality through the lorenz curve. Inequality of equivalized household income, 19852012. The countries in figure 1 are ranked from low to high by the. Their results suggest that the gini coefficient has a negative effect. Focusing on developed countries, i present a model explaining how firms help determine rates of income inequality at the societal level.
This is a list of countries or dependencies by income inequality metrics, including gini coefficients. The most commonly used measurement of economic inequality is the gini index or gini coefficient. The gini was developed by the italian statistician corrado gini in 1912, for the purpose of rating countries by income distribution. The gini index can be used in conjunction with the lorenz curve. The leadership of the netherlands and the united states considerably weakened in twenty years. It rose in 17 out of the 22 oecd countries 1, including in some of. The gini coefficient measures the income distribution in one society country. Mar 12, 2021 of the major developed and emerging economies in 2018, brazil was the most unequal with the a gini index score of 53. Gini index world bank estimate world bank, development research group. In total we include 27 developed countries between 1978 and 20, though the panel is strongly unbalanced in that the period covered is much longer for some countries than others.
Also, instead of being clustered at the bottom, the benelux countries are spread across the rankings based on the gini coefficient for pretax and transfer income, and at least one nordic country finland. The pretax and transfer income gini for italy is 0. Mapping recent inequality trends in developing countries. The gini index is the gini coefficient expressed as a percentage, and is equal to the gini coefficient multiplied by 100. The minimum gini index 0 would mean that the income is even distributed among all countries. The available evidence also suggests that many countries in africa and the middle east experienced an inequality drop in the 1990s2000s. An overview of growing income inequalities in oecd countries. Escwa estimates also show that the real wealth of the regions 37 billionaires is equivalent to the real wealth of the regions poorest 110 million adults 46 per cent of the adult population. Indeed, as we will see below, the pairwise correlation for gini coefficients. Similarly, if the gini coefficient four, say, income, in country a is larger than that for country b, country a has a more unequal income distribution.
Gini coefficients of education world bank document. It was developed by the italian statistician corrado gini and published in his 1912 paper variabilita e mutabilita variability and mutability. Pdf forging a link between human development and income. Between 2000 and 2015, for every country where the gini index increased by more than 1 point, there are two countries where it fell by more than 1 point. The bidirectional gini index is useful for identifying genes that are either upregulated direction 1 or downregulated direction 1 in rare cells. America saw a sizable decline in the gini index in the 2000s. Gini for average country began to fall in early 2000s 19902000. So this index is a summary measure, giving weight to the income shares of the poor and the wealthy. Gini index of household income inequality by region early 1990s and late 2000s region no. Figure 1 shows the series of global inequality measures provided by bourguignon, using a theil index.
The most equal country in this group was france, with a gini index of 31. The values of gini coefficient can vary from 0 to 100, where 0 means total equality of the income redistribution in one society and 100 means total inequality of the income. It is calculated by comparing the area under the lorenz curve and. The maximum gini index 1 would mean that all the income belongs to one country. The gini coefficient was developed by italian statistician corrado gini in 1912 and is the most commonly used measurement of wealth or income inequality. The gini coefficient measures the distribution of incomes across income percentiles. Thanks are due to the workshop participants, especially peter pauly.
The gini index, or gini coefficient, is a measure of the distribution of income across a population developed by the italian statistician corrado gini in 1912. The negative gini index is defined in a similar manner but using a different transformation. The wdi provides a comprehensive overview of development drawing on data from the world bank and more than 30 partners. Income distribution and gini indexes for highincome countries are calculated directly from the lis database, using an estimation method consistent with that applied for developing countries. The gini index is twice the area between the lorenz curve and the curve of perfect equitability. Income inequality among individuals is measured here by five indicators. Why is income inequality increasing in the developed world. The gini coefficient is a number between 0 and 1, where 0 corresponds with perfect equality where everyone has the same income and 1 corresponds with perfect inequality where one person has all the incomeand everyone else has no income. Application of the gini index to measure the concentration on. Sep 25, 2011 the carbon gini index has confirmed that developed countries had excessively occupied the emission space.
It was developed by italian statistician corrado gini 18841965 and is named after him. Clearly, no country with a gini index of 0 or 1 exists. Developed by italian statistician corrado gini in 1912, the gini coefficient is the most commonly used measure of inequality. Of the major developed and emerging economies in 2018, brazil was the most unequal with the a gini index score of 53. In fact, the bulk of total eu inequality is essentially due to the intra country and intraregional component, rather than cross country rodriguezpose and tselios 2009 figure 1 net gini coefficient after taxes and transfers 19602015. Table 1 shows the latest numbers for different countries, compiled by the. Data are based on primary household survey data obtained from government statistical agencies and world bank country departments. Similarly higher the fertility rate, gini index more inequality, inflation rate and co2 emission environmental factor, lower the hdi. The gini index is a measure of inequality that ranges from zero perfect.
Data are based on primary household survey data obtained from government statistical agencies and world bank country. Gini index of household income inequality by development status early 1990s. The gini coefficient is based on the comparison of cumulative proportions of the population against cumulative proportions of income they receive, and it ranges between 0 in the case of perfect equality and 1 in the case of perfect inequality. Labels next to each bar show each country s average market income gini coefficient for 20102014.
Colombia has ranked in the top 2 for gini index since 1998. Gini index in developed and emerging economies 2018 statista. Earlier theories that growth initially increased inequality are now very much in doubt. We find out the income of all the people in a country and then express this information as a cumulative percentage of people against the cumulative share of income earned. The selection of starting year has great influence on the carbon gini index. For the united states, the country with the largest population of the oecd countries, the pretax gini index was 0. This statistic shows a ranking of the estimated worldwide gini index in 2020, differentiated by country.
In all countries, the gini coefficient for disposable income exhibits less inequality than the gini coefficient for market income, as taxes and transfers redistribute income to lowerincome households. Even in asia, where aggregate inequality has been on the rise, there are nonetheless a few countries where inequality is defying the regional trend. In many oecd countries, income inequality has increased in past decades. The gini coefficient saw sustained growth during the 19th and 20th centuries. The gini coefficient of each country was the gini coefficient of each country was calculated as the simple average of the available gini coefficients within each 5year period 19901994 and 20102014. If income is perfectly equally distributed, then the value of the gini coefficient will be zero. Income inequality varies considerably across the oecd countries. Dec 28, 2019 the gini index measures the area between the lorenz curve and a hypothetical line of absolute equality, expressed as a percentage of the maximum area under the line.
But a large part of the debate focuses on income inequality within countries, in particular within advanced economies. Thus a gini index of 0 represents perfect equality, while an index of 100 implies perfect inequality. Gini coefficient1 is not increasing, with the important exception of the postcommunist world. In oecd countries, the gini coefficient rose on average from 0. A lower gini coefficient tends to indicate a higher level of social and economic equality. Jun 02, 2012 this number is the gini index, and its formula is therefore g d 2 z 1 0 x l. It was developed by the italian statistician and sociologist corrado gini the gini coefficient measures the inequality among values. Jul 01, 2016 the positive gini index is calculated based on the transformed data. Some developing countries the most advanced among them succeeded in exporting large quantities, industrially produced. According to the principle of unfccc, developed countries should take the lead to reduce their emissions to redress the unequal situation.
Wealth inequality and closing the poverty gap in arab. Does the impact of gini index on growth differ among gcc countries. United nations concerning the legal status of any country, territory, city or area or of its authorities, or. Feb 24, 2010 the gini coefficient is one way to measure how evenly the income or wealth is distributed throughout a country. A century later our paper argues that it may be time for a rethink on measuring inequality. On inequality, lets do the palma because the gini is so. We chose the gini index as the indicator of inequality because.
Rank country gini index richest 10% to poorest 10% richest 20% to poorest 20% survey year 1 azerbaijan 19 3. We first selected data on gini coefficient covering the whole area urban and rural and population for 90 countries which include some developing and developed countries 3. In particular, the kof index is used as a measure of globalization, and the economic freedom index of the fraser institute is used to measure within country income inequality. In total we include 27 developed countries between 1978 and 20, though the panel is strongly unbalanced in. The oecd averages for total populations in oecd countries was 0. Economic growth is virtually always associated with reduced poverty. The gini coefficient, or gini index, is a measure of the income distribution of a population. Across the distribution database we restrict ourselves to developed countries for which at least 2 waves of data are available. Gini index took place in countries in central and eastern europe, and doubledigit percentage. In fact, the bulk of total eu inequality is essentially due to the intra country and intraregional component, rather than cross country rodriguezpose and tselios 2009 figure 1 net gini. Chapter 1 inequality of outcomes in asia and the pacific. Confronting inequality in developing countries income inequality table 3.
The gini coefficient of each country was calculated as the simple average of the available gini coefficients within each 5year period 19901994 and 2010. Recent data make it clear that the gini is remarkably stable in individual countries over time. Poverty, inequality, and conflict in developing countries. These documents provide them with the macroeconomic, structural and social policies and programs required to promote growth and reduce poverty. Trends in the average gini coefficient of withincountry. Jan 16, 20 and using this gini index, america as a whole has a degree of income inequality that is higher than almost any other developed country, according to the most recent data compiled by the. The gini coefficient or gini index is a statistical measure of distribution to represent the income or wealth of a country s residents. Notably, as measured by the gini index, between 1980 and 2011 income. The gini coefficient, sometimes called the gini index or gini ratio, is a statistical measure of distribution intended to represent the income or wealth distribution of a nation. If income is as unequally distributed as possible that is, if a single hh receives all hh income in the country then the gini coefficient will be one. The gini coefficient is based on the comparison of cumulative proportions of the population against cumulative proportions of income they receive, and it ranges between 0 in the case of perfect equality and 1. A popular representation of income inequality, the gini coefficient is based on the lorenz curve, which plots the share of population against the share of income received. Data and research on social and welfare issues including families and children, gender equality, gini coefficient, wellbeing, poverty reduction, human capital and inequality. Pdf poverty, growth and inequality in developing countries.
The gini coefficient here measures the degree of income inequality on a scale from 0. Most countries in africa have developed prsps with support from the bank. Feb 10, 2021 this statistic shows a ranking of the estimated worldwide gini index in 2020, differentiated by country. The countries with the highest gini coefficients are. Inequality is unacceptably high in most developing countries and has, on. The lorenz curve gini coefficient or index the gini coefficient, or index, named after the italian statistician, corrado gini, is a mathematical devise to compare income distributions over time and between economies. Preliminary empirical analysis finds that, first, education inequality for most of the countries has been declining during the three decades, with a few exceptions. Gorrado gini 18841965, an italian statistician and sociologist, developed the gini index in 1912. The world development indicators wdi is the statistical benchmark that helps measure the progress of development. Inequality of impact among countries further studies have looked at unequal relationships among countries and the implications for the natural environment. The gini coefficient, invented by the italian statistician corado gini in 1912, is recognized as a measure of equality in the distribution of income in a given society catalano et al. Causes and consequences of income inequality international. The gini coefficient, a standard measure of income inequality that ranges from 0 when everybody has identical incomes to 1 when all income goes to only one person, stood at an average of 0.
This new pattern in the evolution of global inequality is the main focus of both books. The gini coefficient, a standard measure of income inequality that ranges from 0 when everybody has identical incomes to 1 when all income goes to only one. Gini increased in more than half of countries 20002015. The gini was developed in the early 1900s in fact about 100 years ago by italian statistician, corrado gini see pic, looks like a real party animal. Inequality, gini coefficient, sustainable development, growth. He explained the coefficient in his paper variabilita e mutabilita variability and mutability. We define a developing country as a country with a relatively low standard of living, undeveloped industrial base, and moderate to low human development index hdi. The united states, for example, is widely seen as the country. Reducing income inequality while boosting economic.
316 175 1752 876 1119 969 1194 1760 583 946 1858 999 259 891 360 1457 1031 568 1321 1863 1917 1412 287