The idea that more wealth for some will translate into more wealth for everyone has deep roots. Today, data shows that the gap between the richest and the poorest has never been wider.
In 1912, Italian sociologist and statistician Corrado Gini developed a means of measuring wealth distribution within societies known as the Gini index or Gini coefficient: its value ranges from 0 (or 0%) to 1 (or 100%), with the former representing perfect equality (wealth distributed evenly) and the latter representing perfect inequality (wealth held in few hands).
Today, the Gini coefficient is still one the most widely used tool to chart the economic gap within a country's wealthiest and poorest citizens. The World Economic Forum (WEF) gathered data from the World Bank, the Organisation for Economic Co-operation and Development and other sources, and along with other indicators to create the Inclusive Development Index 2018, a snapshot of the gap between rich and poor.
According to the WEF index, income inequality has risen or remained stagnant in 20 of the 29 advanced economies while poverty increased in 17. Although most emerging economies have improved in these respects—84% of them registered a decline in poverty—their absolute levels of inequality remain much higher. In addition, the report states, both in advanced and emerging economies, wealth is significantly more unequally distributed than income: "This problem has improved little in recent years, with wealth inequality rising in 49 economies."
Income inequality has increased more rapidly in North America, China, India and Russia than anywhere else notes the World Inequality Report 2018 produced by the World Inequality Lab, a research center based at the Paris School of Economics. The difference between Western Europe and the United States in this regard is particularly striking: “While the top 1% income share was close to 10% in both regions in 1980, it rose only slightly to 12% in 2016 in Western Europe while it shot up to 20% in the United States. Meanwhile, in the United States, the bottom 50% income share decreased from more than 20% in 1980 to 13% in 2016.” Continental Europe, the report emphasized, saw income inequality moderated by educational and wage-setting policies that were relatively more favorable to low and middle-income groups and a lesser decline in the progressivity of its tax code.
Another problem to consider is that when massive proportions of a nation's income and wealth are concentrated in the hands of a few, overall economic growth appears to suffer. A 2015 study by the International Monetary Fund found that “if the income share of the top 20% (the rich) increases, then GDP growth actually declines over the medium term, suggesting that the benefits do not trickle down” while “an increase in the income share of the bottom 20% (the poor) is associated with higher GDP growth.”
Country |
Net Income Gini Index |
Wealth Gini Index |
GDP per Capita (USD) |
Employment Rate (%) |
Median Daily Income (USD PPP) |
Poverty Rate (%) |
Life Expectancy (Years) |
|---|---|---|---|---|---|---|---|
|
Albania |
38.60 |
44.80 |
4,712 |
42.10 |
6.50 |
7.70 |
68.80 |
|
Algeria |
32.20 |
75.80 |
4,846 |
38.90 |
7.20 |
3.90 |
66.30 |
|
Argentina |
38.60 |
72.30 |
10,149 |
57.00 |
14.60 |
4.50 |
67.60 |
|
Armenia |
36.00 |
58.30 |
3,925 |
52.90 |
5.70 |
13.50 |
66.90 |
|
Australia |
33.20 |
65.20 |
55,671 |
60.90 |
44.40 |
12.80 |
71.90 |
|
Azerbaijan |
38.60 |
51.00 |
5,859 |
61.90 |
8.50 |
2.70 |
64.70 |
|
Bangladesh |
39.50 |
57.90 |
1,030 |
59.70 |
2.90 |
59.20 |
62.40 |
|
Belgium |
25.90 |
63.00 |
45,308 |
49.10 |
43.80 |
9.10 |
71.10 |
|
Bolivia |
43.50 |
74.20 |
2,458 |
70.50 |
9.30 |
12.90 |
62.50 |
|
Brazil |
44.90 |
83.20 |
10,826 |
59.30 |
11.20 |
9.30 |
65.50 |
|
Bulgaria |
33.90 |
52.90 |
7,929 |
49.80 |
15.30 |
3.80 |
66.40 |
|
Burundi |
31.60 |
56.30 |
218 |
82.30 |
1.30 |
90.10 |
52.20 |
|
Cambodia |
36.60 |
70.00 |
1,078 |
80.70 |
N/A |
N/A |
58.10 |
|
Cameroon |
39.80 |
74.10 |
1357 |
72.70 |
3.60 |
45.00 |
50.30 |
|
Canada |
31.20 |
73.50 |
50232 |
60.80 |
49.20 |
12.60 |
72.30 |
|
Chad |
38.30 |
69.30 |
860 |
67.40 |
2.40 |
66.50 |
46.10 |
|
Chile |
45.90 |
78.60 |
15,020 |
58.30 |
14.20 |
3.10 |
70.50 |
|
China |
51.00 |
78.90 |
6,894 |
67.50 |
7.70 |
12.10 |
68.50 |
|
Colombia |
48.90 |
74.20 |
7,526 |
61.80 |
9.00 |
13.10 |
65.20 |
|
Costa Rica |
45.70 |
69.40 |
9,714 |
56.10 |
14.50 |
4.20 |
69.80 |
|
Croatia |
29.30 |
49.80 |
14,372 |
45.10 |
15.90 |
1.90 |
69.40 |
|
Czech Republic |
25.60 |
64.80 |
21,707 |
57.00 |
24.30 |
5.90 |
69.40 |
|
Denmark |
25.30 |
80.90 |
60,268 |
58.30 |
44.70 |
5.50 |
71.20 |
|
Dominican Republic |
44.60 |
N/A |
6,09 |
55.90 |
9.80 |
6.90 |
65.10 |
|
Egypt |
47.00 |
91.70 |
2,724 |
43.60 |
4.90 |
16.10 |
62.20 |
|
El Salvador |
38.90 |
65.70 |
3,803 |
59.00 |
7.60 |
9.80 |
64.10 |
|
Estonia |
34.70 |
56.40 |
17,853 |
57.60 |
22.10 |
12.50 |
69.00 |
|
Finland |
25.60 |
76.70 |
45,709 |
53.00 |
43.50 |
6.30 |
71.00 |
|
France |
29.90 |
70.20 |
42,013 |
49.70 |
44.70 |
8.20 |
72.60 |
|
Georgia |
40.50 |
66.80 |
4,080 |
59.60 |
5.10 |
25.30 |
66.40 |
|
Germany |
29.00 |
79.10 |
45,552 |
57.70 |
45.30 |
9.50 |
71.30 |
|
Ghana |
38.30 |
66.10 |
1,708 |
72.60 |
4.40 |
34.90 |
55.30 |
|
Greece |
33.20 |
67.70 |
22,736 |
39.40 |
18.40 |
14.80 |
71.90 |
|
Guatemala |
44.50 |
N/A |
3,100 |
60.20 |
5.60 |
25.30 |
62.20 |
|
Honduras |
48.30 |
N/A |
2,138 |
61.60 |
4.80 |
34.80 |
64.90 |
|
Hungary |
28.70 |
45.30 |
14,840 |
51.20 |
18.20 |
1.00 |
67.40 |
|
Iceland |
24.40 |
46.70 |
48,614 |
71.10 |
43.40 |
6.50 |
72.70 |
|
India |
47.90 |
83.00 |
1,861 |
51.90 |
2.90 |
60.40 |
59.60 |
|
Indonesia |
45.70 |
83.70 |
3,974 |
63.60 |
4.60 |
33.80 |
62.10 |
|
Iran |
38.80 |
67.30 |
5,758 |
39.70 |
12.50 |
2.50 |
66.50 |
|
Ireland |
30.30 |
81.30 |
66,787 |
54.90 |
38.00 |
9.20 |
71.50 |
|
Israel |
36.90 |
74.20 |
33,783 |
60.30 |
25.80 |
19.50 |
72.80 |
|
Italy |
33.30 |
66.00 |
34,284 |
42.70 |
34.30 |
13.70 |
72.80 |
|
Japan |
29.90 |
60.90 |
47,608 |
57.20 |
34.80 |
16.10 |
74.90 |
|
Jordan |
40.00 |
76.10 |
3,258 |
34.80 |
8.70 |
2.10 |
65.00 |
|
Kazakhstam |
28.80 |
92.60 |
10,570 |
67.70 |
9.80 |
0.40 |
63.30 |
|
Kenya |
41.60 |
77.20 |
1,143 |
59.80 |
N/A |
N/A |
55.60 |
|
Korea, South |
30.70 |
70.00 |
25,459 |
58.60 |
34.20 |
13.80 |
73.20 |
|
Kyrgyz Republic |
34.10 |
62.90 |
1,038 |
58.20 |
4.40 |
23.30 |
63.90 |
|
Lao PDR |
41.10 |
84.90 |
1,643 |
76.50 |
2.90 |
58.50 |
57.90 |
|
Latvia |
36.30 |
53.60 |
14,715 |
54.50 |
25.20 |
0.90 |
67.10 |
|
Lesotho |
49.30 |
79.80 |
1,387 |
48.40 |
1.50 |
78.00 |
46.60 |
|
Lithuania |
34.20 |
51.60 |
15,873 |
53.90 |
18.20 |
2.70 |
66.10 |
|
Luxembourg |
28.40 |
68.10 |
111,001 |
55.40 |
61.80 |
8.10 |
71.80 |
|
Macedonia FYR |
36.10 |
56.40 |
5,223 |
40.90 |
9.00 |
10.00 |
67.50 |
|
Madagascar |
37.20 |
67.10 |
416 |
84.60 |
1.10 |
91.10 |
56.90 |
|
Malawi |
37.30 |
73.70 |
482 |
75.60 |
1.30 |
88.40 |
51.20 |
|
Malaysia |
42.80 |
82.00 |
11,028 |
61.30 |
14.10 |
3.10 |
66.50 |
|
Mali |
32.30 |
64.50 |
743 |
61.00 |
2.00 |
79.00 |
51.10 |
|
Mauritania |
30.30 |
62.30 |
1,296 |
41.80 |
4.90 |
23.60 |
55.10 |
|
Mexico |
45.90 |
73.20 |
9,707 |
59.70 |
6.90 |
11.80 |
67.40 |
|
Moldova |
33.70 |
47.90 |
2,063 |
40.20 |
8.50 |
1.40 |
64.90 |
|
Mongolia |
37.80 |
57.00 |
3,895 |
58.50 |
8.90 |
3.20 |
62.10 |
|
Morocco |
35.70 |
81.40 |
3,196 |
44.40 |
N/A |
N/A |
65.10 |
|
Mozambique |
39.90 |
71.10 |
515 |
59.80 |
1.40 |
88.50 |
49.60 |
|
Namibia |
55.00 |
91.00 |
6,021 |
44.50 |
3.50 |
47.00 |
57.50 |
|
Nepal |
39.50 |
67.30 |
682 |
80.30 |
3.20 |
50.90 |
61.20 |
|
Netherlands |
26.60 |
73.00 |
52,111 |
59.70 |
43.30 |
7.90 |
72.20 |
|
New Zealand |
32.50 |
72.30 |
36,842 |
63.90 |
N/A |
10.90 |
71.60 |
|
Nicaragua |
43.20 |
71.90 |
1,946 |
60.60 |
7.40 |
13.80 |
63.80 |
|
Nigeria |
39.00 |
69.50 |
2,458 |
53.60 |
1.80 |
77.60 |
47.70 |
|
Norway |
24.90 |
80.50 |
89,818 |
61.70 |
63.80 |
8.10 |
72.00 |
|
Pakistan |
36.20 |
52.60 |
1,182 |
50.90 |
3.70 |
39.70 |
57.80 |
|
Panama |
46.10 |
76.30 |
10,982 |
61.60 |
14.50 |
7.00 |
68.10 |
|
Paraguay |
44.90 |
75.20 |
3,928 |
67.70 |
11.70 |
7.40 |
65.20 |
|
Peru |
45.40 |
77.80 |
6,089 |
70.60 |
10.30 |
9.30 |
65.70 |
|
Philippines |
47.90 |
83.90 |
2,753 |
60.90 |
5.00 |
33.70 |
61.10 |
|
Poland |
32.10 |
71.70 |
15,049 |
53.20 |
20.50 |
0.30 |
68.70 |
|
Portugal |
34.80 |
70.90 |
22,347 |
51.80 |
21.20 |
13.50 |
71.40 |
|
Romania |
33.00 |
62.30 |
10,081 |
52.10 |
8.70 |
4.50 |
66.80 |
|
Russian Federation |
43.90 |
82.60 |
11,099 |
59.70 |
17.10 |
0.30 |
63.40 |
|
Rwanda |
44.30 |
73.00 |
739 |
82.70 |
1.60 |
81.50 |
56.60 |
|
Senegal |
34.50 |
69.80 |
1,093 |
51.80 |
2.40 |
67.50 |
58.30 |
|
Serbia |
34.00 |
54.20 |
5,852 |
42.90 |
11.30 |
1.40 |
67.70 |
|
Sierra Leone |
32.00 |
58.70 |
455 |
64.80 |
1.90 |
81.30 |
44.40 |
|
Singapore |
39.80 |
73.30 |
52,601 |
65.70 |
N/A |
N/A |
73.90 |
|
Slovak Republic |
26.10 |
46.30 |
19,238 |
53.50 |
8.70 |
8.70 |
68.10 |
|
Slovenia |
25.90 |
55.10 |
24,387 |
52.30 |
30.90 |
9.40 |
71.10 |
|
South Africa |
57.70 |
86.70 |
7,504 |
39.50 |
4.70 |
35.90 |
54.40 |
|
Spain |
34.30 |
65.70 |
31,450 |
46.90 |
30.70 |
15.30 |
72.40 |
|
Sri Lanka |
51.40 |
66.50 |
3,759 |
49.10 |
5.50 |
16.10 |
67.00 |
|
Sweden |
25.70 |
83.40 |
56,319 |
59.90 |
48.30 |
8.00 |
72.00 |
|
Switzerland |
29.30 |
69.40 |
75,726 |
65.40 |
55.60 |
7.80 |
73.10 |
|
Tajikistan |
44.70 |
53.50 |
968 |
61.20 |
5.30 |
20.00 |
62.10 |
|
Tanzania |
42.20 |
55.20 |
867 |
76.50 |
1.90 |
79.00 |
54.20 |
|
Thailand |
43.70 |
85.10 |
5,901 |
70.80 |
11.20 |
1.10 |
66.80 |
|
Tunisia |
33.30 |
69.10 |
4,265 |
40.60 |
7.70 |
9.10 |
66.70 |
|
Turkey |
39.80 |
81.80 |
14,071 |
45.10 |
13.10 |
2.40 |
66.20 |
|
Uganda |
37.60 |
68.60 |
14,071 |
83.10 |
2.50 |
66.60 |
54.00 |
|
Ukraine |
26.30 |
90.10 |
2,906 |
53.90 |
10.20 |
0.50 |
64.10 |
|
United Kingdom |
32.80 |
73.50 |
41,603 |
59.60 |
39.40 |
10.90 |
71.40 |
|
United States |
37.80 |
85.90 |
52,195 |
58.90 |
48.90 |
16.80 |
69.10 |
|
Uruguay |
37.00 |
63.90 |
14,010 |
60.10 |
19.50 |
1.40 |
67.90 |
|
Vietnam |
42.20 |
74.50 |
1,770 |
76.70 |
6.80 |
11.60 |
66.60 |
|
Zambia |
49.50 |
81.00 |
1,622 |
69.70 |
1.60 |
74.30 |
53.70 |
|
Zimbabwe |
39.80 |
73.00 |
909 |
78.30 |
3.40 |
47.20 |
52.10 |
Source: The World Economic Forum's Inclusive Development Index 2018. N/A — Not available.