Drawing on forthcoming research, Lakner went beyond summarizing the evolution of global inequality to delve into inequality trends within countries and regions. In contrast to measures of global inequality that ignore national borders, this perspective takes into account inequality between citizens within a country.
Perhaps most notably, inequality in Latin American countries fell between 2000 and 2015, with 16 countries registering a decline in inequality and none registering a significant increase. But Latin America was an outlier during this period, with other regions showing a more mixed picture. For example, in Sub-Saharan Africa, the sample of countries was evenly split between those with rising and falling inequality (in line with this recent World Bank study).
While many researchers have devoted years of effort to constructing accurate data on inequality, a task like this inevitably faces hurdles, according to Lakner. One challenge is tracking the incomes of the top 1 percent of earners. Typically, researchers rely on household surveys to track incomes, but the richest are rarely represented in these surveys. Instead, researchers are increasingly turning to tax data to uncover this information.
Lakner also mentioned the challenges of accurately comparing incomes across countries via purchasing power parity exchange rates and incomplete household survey coverage, especially in Sub-Saharan Africa.
Turning to the future, Lakner avoided making any stark predictions. However, he did point to two factors that will be central to the evolution of global inequality. On the one hand, India will likely continue to catch up with incomes in rich countries, which will further reduce global inequality. On the other hand, population growth and poor economic performance in many Sub-Saharan African countries will exacerbate global inequality.
“Inequality has been a hot topic for research for decades,” said Aart Kraay, Director of Research at the World Bank. “While we’ve made many notable advances in this field, there is still much work to be done, not only to track inequality but also to better understand how the rules of the global economy can help drive inclusive growth.”