Concepedia

The World Distribution of Income: Falling Poverty and ... Convergence, Period

The Quarterly Journal of Economics · 2006 · 825 citations · 55 references

TL;DR

The authors construct a global income distribution for 138 countries from 1970 to 2000 by anchoring national‑level means with GDP per capita and dispersions with survey data, then compute eight inequality indices from this distribution. Poverty headcounts fell by one‑third to one‑half between 1970 and 2000 across four poverty lines, reducing the global poor by 250–500 million, and all eight inequality indices indicate a decline in worldwide inequality during the 1980s and 1990s.

Abstract

We estimate the World Distribution of Income by integrating individual income distributions for 138 countries between 1970 and 2000. Country distributions are constructed by combining national accounts GDP per capita to anchor the mean with survey data to pin down the dispersion. Poverty rates and head counts are reported for four specific poverty lines. Rates in 2000 were between one-third and one-half of what they were in 1970 for all four lines. There were between 250 and 500 million fewer poor in 2000 than in 1970. We estimate eight indexes of income inequality implied by our world distribution of income. All of them show reductions in global inequality during the 1980s and 1990s.