Trends in Intercountry Income Inequality

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This is a study of intercountry income inequality. Nations vary greatly in the average incomes of their citizens, by a factor of about 100 worldwide, and this intercountry inequality is the major component of world income inequality, significantly more important than inequality within nations. This study has three related objectives. First, it will construct trends in intercountry inequality since mid-century based on two measures of national income (one based on exchange rates, the other based on purchasing power parity) and on three measures of inequality (the Gini coefficient, Theil's index, and the squared coefficient of variation). Second, it will decompose trends in intercountry inequality into the part due to changing income ratios and the part due to nations' changing shares of the world population. Third, it will estimate each nation's contribution to total intercountry inequality at each measurement point at five-year intervals. %%% This research will make it possible to determine the characteristics of nations that have increased or decreased their contribution to intercountry inequality over time. Thus this dataset will provide the foundation for a quantitative scientific literature on the underlying causes of change in what is the major component of world inequality: inequality between nations.