Global Inequality and Global Inequality Extraction Ratio: The Story of the Last Two Centuries

27 Pages Posted: 2 Aug 2009

See all articles by Branko Milanovic

Branko Milanovic

World Bank - Development Research Group (DECRG); University of Maryland

Date Written: July 30, 2009

Abstract

Using social tables, we make an estimate of global inequality (inequality among world citizens) in early 19th century. We then show that the level and composition of global inequality have changed over the last two centuries. The level has increased reaching a high plateau around 1950s, and the main determinants of global inequality have become differences in mean country incomes rather than inequalities within nations. The inequality extraction ratio (the percentage of total inequality that was extracted by global elites) has remained surprisingly stable, at around 70 percent of the maximum global Gini, during the last 100 years.

Keywords: global inequality, history, inequality extraction ratio

JEL Classification: D31, N30

Suggested Citation

Milanovic, Branko, Global Inequality and Global Inequality Extraction Ratio: The Story of the Last Two Centuries (July 30, 2009). Available at SSRN: https://ssrn.com/abstract=1441538 or http://dx.doi.org/10.2139/ssrn.1441538

Branko Milanovic (Contact Author)

World Bank - Development Research Group (DECRG) ( email )

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HOME PAGE: http://econ.worldbank.org/staff/bmilanovic

University of Maryland ( email )

College Park
College Park, MD 20742
United States

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