Global and National Inequality: Are They Connected?

Abstract

Most studies consider the trends of income inequality between nations and between individuals within nations separately. In this paper, we analyze between-nation and within-nation inequality together. We ?nd that income inequality both within and between nations has been increasing over time. Furthermore, we show that the rate of change for both are synchronous. We speculate that this synchronicity is due to the formation of a global class system. We also ?nd evidence that these inequalities can move in opposite directions—during the only period the global income gap declines, inequality within non-core countries reaches its peak. We conclude by hypothesizing that the observed convergence might result from global opposition (i.e., increasing global inequality between nations) producing national cohesion, causing the observed lessening of income inequality scores within non-core countries.