Income Distribution Across Countries: How is it Measured and What Do the Results Show?

Recent studies of trends in the distribution of income across countries and globally have produced highly conflicting results. Several studies, including some from the World Bank and UNDP, have reported that income disparities between nations have more than doubled since 1960. Other investigations have found that income inequality has been reduced over the same period. The three main reasons for the diverging results identified in the paper are the use of different income measurements, different distribution concepts and the weighting or not of countries according to the size of the populations. This paper aims at clarifying the relative importance of these differences behind the conflicting results and to reach a firm conclusion on what has really happened.