Global interpersonal inequality: Trends and measurement

This paper discusses different approaches to the measurement of global interpersonal in equality. Trends in global interpersonal inequality during 1975-2005 are measured using data from UNU-WIDER's World Income Inequality Database. In order to better understand the trends, global interpersonal inequality is decomposed into within-country and between-country inequality. The paper illustrates that the relationship between global interpersonal inequality and these constituent components is a complex one. In particular, we demonstrate that the changes in China's and India's income distributions over the past 30 years have simultaneously caused inequality to rise domestically in those countries, while tending to reduce global inter-personal inequality. In light of these findings, we reflect on the meaning and policy relevance of global vis-à-vis domestic inequality measures.