Population and Sample Selection Effects in Measuring International Income Inequality

Abstract

The issue of world income inequality has been debated widely in the literature. At issue is whether inequality has, on the whole, been increasing or decreasing over time. I reexamine results from Firebaugh’s (1999) seminal article on demographic e?ects on inequality, in which he found a 30-year “plateau” of world income inequality when countries are weighted based on their populations. In contrast, I show that the increasing integration of market economies over the past decades has been re?ected in dramatically increasing international inequality. “Inequality” as currently measured, however, may bear little resemblance to a naive under-standing of the term. I conclude with some preliminary ?gures from an alternate characterization of convergence and divergence, based on world-systems categories.