Global Income Inequality, 1820-2020

Global Income Inequality, 1820-2020: The Persistence and Mutation of Extreme Inequality

In this paper, Lucas Chancel and Thomas Piketty mobilize newly available historical series from the World Inequality Database to construct world income distribution estimates from 1820 to 2020. The authors find that the level of global income inequality has always been very large, reflecting the persistence of a highly hierarchical world economic system. Global inequality increased between 1820 and 1910, in the context of the rise of Western dominance and colonial empires, and then stabilized at a very high level between 1910 and 2020. Between 1820 and 1910, both between-country and within-country inequality were increasing. In contrast, these two components of global inequality have moved separately between 1910 and 2020: within-country inequality dropped in 1910-1980 (while between-country inequality kept increasing) but rose in 1980-2020 (while between-country inequality started to decline). As a consequence of these contradictory and compensating evolutions, early 21st century neo-colonial capitalism involves similar levels of inequality as early 20th century colonial capitalism, though it is based upon a different set of rules and institutions. The authors also discuss how alternative rules such as fiscal revenue sharing could lead to a significant drop in global inequality.

Key findings

• Global inequality more than doubled between 1820 and 1910, from less than 20% to about 40%, and stabilized around 40% between 1910 and 2020.
• Within-country inequality has dropped between 1910 and 1980 and has risen since 1980.
• Between country inequality has increased between 1910 and 1980 and declined since 1980.
• The share of global income going to top 10% highest incomes at the world level has fluctuated around 50-60% between 1820 and 2020.
• The share of global income going to the bottom 50% lowest incomes has generally been around or below 10%.

Figure: Global income inequality, 1820-2020 – Ratio Top10/Bottom 50

Global inequality, as measured by the ratio T10/B50 between the average income of the top 10% and the average income of the bottom 50%, more than doubled between 1820 and 1910, from less than 20 to about 40, and stabilized around 40 between 1910 and 2020.

For more information, check out the page: www.wid.world/longrun

Contacts

Authors

• Lucas Chancel (World Inequality Lab, Paris School of Economics, Sciences Po): lucas.chancel@sciencespo.fr
• Thomas Piketty (School for Advanced Studies in the Social Sciences – EHESS; Paris School of Economics; World Inequality Lab): thomas.piketty@psemail.eu

Media inquiries

• Olivia Ronsain, World Inequality Lab: olivia.ronsain@wid.world; +33 7 63 91 81 68