Journal Article
Is the era of declining global income inequality over?

This study examines the trajectory of global income inequality since 1981. Commonly used (relative) definitions indicate a decline in global inequality since the late 1980s. Looking ahead, it has been intuited that the influence of China's economic development — and that of other rapidly growing, populous nations — on the between-country component will, at some juncture, diminish and start to add to global inequality should economic growth persist.

Ourstudy formalizes the turning point of global inequality through a simple model. For illustrative purposes, we empirically present the implications for the timing of the turning point in the context of a weaker post-pandemic growth recovery versus a stronger, albeit improbable, post-pandemic growth recovery.

We conclude by arguing that the era of declining global income inequality is likely over, considering the forces influencing both the between-country and within-country components.