Global Earnings Inequality, 1970–2015

75 Pages Posted: 22 May 2017  

Olle Hammar

Uppsala University - Department of Economics; Research Institute of Industrial Economics (IFN)

Daniel Waldenström

Research Institute of Industrial Economics

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Abstract

We estimate trends in global earnings dispersion across occupational groups using a new database covering 66 developed and developing countries between 1970 and 2015. Our main finding is that global earnings inequality has declined, primarily during the 2000s, when the global Gini coefficient dropped nearly 10 points and the earnings share of the world's poorest half doubled. Decomposition analyses emphasize the role of income convergence between poor and rich countries and that earnings have become more similar within occupations in traded industries. Sensitivity checks show that the results are robust to varying real exchange rates, inequality measures and population definitions.

Keywords: global inequality, development, inequality decomposition, labor markets

JEL Classification: D31, F01, O15

Suggested Citation

Hammar, Olle and Waldenström, Daniel, Global Earnings Inequality, 1970–2015. IZA Discussion Paper No. 10762. Available at SSRN: https://ssrn.com/abstract=2971378

Olle Hammar (Contact Author)

Uppsala University - Department of Economics ( email )

Box 513
SE-75120 Uppsala
Sweden

Research Institute of Industrial Economics (IFN) ( email )

Box 55665
Grevgatan 34, 2nd floor
Stockholm, SE-102 15
Sweden

Daniel Waldenstrom

Research Institute of Industrial Economics ( email )

P.O. Box 55665
Grevgatan 34, 2nd floor
Stockholm, SE-102 15
Sweden

HOME PAGE: http://www.ifn.se/danielw

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