Wednesday, May 4, 2011

Inequality is growing around the world

A new OECD reports concludes that "inequality is on the rise in most OECD countries" and that:

In a large majority of OECD countries, household incomes of the top 10% grew faster than those of the poorest 10%, leading to widening income inequality. Differences in the pace of income growth across household groups were particularly pronounced in some of the English-speaking countries, some of the Nordic countries and Israel. In Israel and Japan, real incomes of people at the bottom of the income ladder actually have fallen since the mid-1980s.

As The Economist summarizes that data as follows:

American society is more unequal than those in most other OECD countries, and growth in inequality there has been relatively large. But with very few exceptions, the rich have done better over the past 30 years, even in highly egalitarian places like Scandinavia.

Technology and globalization are likely the primary causes of the recent changes, although the institutions, culture and government policies can also make a difference.

Here's a chart from the Economist, HT: Greg Mankiw

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