A World of Unequal Incomes

Abstract

Income inequality is usually greater in poor countries than in rich countries. Among rich countries, in comes tend to be more equally distributed in those countries which have relatively homogeneous populations, for example, in Denmark. Socialist countries have more equality in income distribution than other countries. These facts suggest that, among nonsocialist countries, incomes should become more equal as the level of income rises. Generally, this has indeed been the historical experience of the advanced industrial coun tries in the last century or so. However, it is possible that income distribution became less equal at an earlier stage of development. This hypothesis of inequality widening and then narrowing as per capita incomes rise is supported by current comparisons of inequality in different countries. This would be consistent with a tendency for income inequality to increase over time in a number of today's less developed coun tries (LDCs). It is possible, particularly where the rate of growth in per capita gross national product ( GNP ) is not rapid, that the real as well as the relative income of the lower income groups may decline. The degree of inequality in the world as a whole seems to be greater than that found within most countries. There does not appear to have been very much change in the degree of world income inequality in the last quarter century.