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World Changes in Inequality: an Overview of Facts, Causes, Consequences, and Policies1

Author

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  • François Bourguignon

    (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique)

Abstract
This article reviews various issues linked to the rise in inequality observed in a number of countries, particularly developed countries, over the past quarter century. Various sources of evidence regarding the time profile of inequality are examined and do not always fit the common view that inequality is trending upward everywhere. Overall, changes in inequality appear to be very country-specific. The same conclusion does obtain when examining the causes of these changes. There is little doubt that there are common forces affecting the distribution of income in most countries, but idiosyncratic factors have enhanced their effects in some cases and offset them in others. Country specificity also holds with regard to policies aimed at correcting inequality, even though globalization imposes constraints on some key redistribution instruments like taxation and the regulation of financial markets. International coordination and, in particular, more transparency in cross-border financial operations are needed for governments to recover some autonomy in these matters.

Suggested Citation

  • François Bourguignon, 2018. "World Changes in Inequality: an Overview of Facts, Causes, Consequences, and Policies1," Post-Print hal-01784346, HAL.
    • Handle: RePEc:hal:journl:hal-01784346
    DOI: 10.1093/cesifo/ifx028
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    3. Angelopoulos, Angelos & Economides, George & Liontos, George & Philippopoulos, Apostolis & Sakkas, Stelios, 2022. "Public redistributive policies in general equilibrium: An application to Greece," The Journal of Economic Asymmetries, Elsevier, vol. 26(C).
    4. Victor Ginsburgh & Sergio Perelman & Pierre Pestieau, 2021. "Populism and Social Polarization in European Democracies [Bien-Être et Vote]," CESifo Economic Studies, CESifo Group, vol. 67(4), pages 371-404.
    5. Bruno Bises & Francesco Bloise & Antonio Scialà, 2024. "Labor share as an "automatic stabilizer" of income inequality," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 31(2), pages 511-532, April.
    6. D'Elia, Enrico & Gabriele, Stefania, 2022. "Self-employment income: estimation methods, patterns, impact on distribution," Structural Change and Economic Dynamics, Elsevier, vol. 62(C), pages 390-398.
    7. Giampaolo Arachi & Michele G Giuranno & Paola Profeta, 2018. "Introduction to the Special Issue ‘Inequality and Public Policies’, CESifo Economic Studies 2018," CESifo Economic Studies, CESifo Group, vol. 64(3), pages 339-344.
    8. Sicular, Terry & Yang, Xiuna & Gustafsson, Björn Anders, 2021. "The Rise of China's Global Middle Class in International Perspective," IZA Discussion Papers 14531, Institute of Labor Economics (IZA).
    9. Gnangnon, Sèna Kimm, 2020. "Development Aid, Remittances Inflows and Wages in the Manufacturing Sector of Recipient-Countries," EconStor Preprints 213439, ZBW - Leibniz Information Centre for Economics.
    10. Terry Sicular & Xiuna Yang & Björn Gustafsson, 2022. "The Rise of China's Global Middle Class in an International Context," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 30(1), pages 5-27, January.
    11. repec:lib:000cis:v:10:y:2022:i:1:p:3-22 is not listed on IDEAS
    12. Bruno Bises & Francesco Bloise & Antonio ScialÃ, 2021. "Functional income distribution, inequality and the effectiveness of fiscal redistribution: evidence from OECD countries," Public Finance Research Papers 49, Istituto di Economia e Finanza, DSGE, Sapienza University of Rome.
    13. Economides, George & Papageorgiou, Dmitris & Philippopoulos, Apostolis, 2020. "Macroeconomic policy lessons from Greece," LSE Research Online Documents on Economics 107155, London School of Economics and Political Science, LSE Library.
    14. George Economides & Dimitris Papageorgiou & Apostolis Philippopoulos, 2020. "Macroeconomic Policy Lessons for Greece from the Debt Crisis," CESifo Working Paper Series 8188, CESifo.
    15. Joséphine Leuba, 2019. "Natural amenities and the spatial distribution of Swiss income," IRENE Working Papers 19-04, IRENE Institute of Economic Research.
    16. George Economides & Dimitris Papageorgiou & Apostolis Philippopoulos, 2021. "Austerity, Assistance and Institutions: Lessons from the Greek Sovereign Debt Crisis," Open Economies Review, Springer, vol. 32(3), pages 435-478, July.
    17. George Economides & Apostolis Philippopoulos & Stylianos Sakkas, 2021. "Redistributive policies in general equilibrium," JRC Working Papers on Territorial Modelling and Analysis 2021-08, Joint Research Centre.
    18. Lawrence Adu Asamoah, 2021. "Institutional Quality and Income Inequality in Developing Countries: A Dynamic Panel Threshold Analysis," Progress in Development Studies, , vol. 21(2), pages 123-143, April.
    19. Birgitta Jansson, 2021. "Income inequality and intragenerational income mobility in Sweden from 1983 to 2010: Following two birth cohorts," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 158(2), pages 751-773, December.
    20. Woo, Jaejoon, 2023. "Financial crises and inequality: New evidence from a panel of 17 advanced economies," The Journal of Economic Asymmetries, Elsevier, vol. 28(C).

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    More about this item

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D33 - Microeconomics - - Distribution - - - Factor Income Distribution
    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • F60 - International Economics - - Economic Impacts of Globalization - - - General

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