How Does Actual Inequality Shape People’s Perceptions of Inequality? A Class Perspective

While some scholars suggest that awareness of income inequality is strongest when the actual level of inequality is high, others find that individuals’ awareness of income inequality is largely unresponsive to actual inequality. In this article, we argue that individuals in different social class positions often respond to the actual levels of income inequality distinctively, and therefore a class perspective is essential in understanding how actual inequality and people’s perceptions of it are associated. Using data from the social inequality modules of the International Social Survey Programme (ISSP, 1992, 1999, and 2009) as well as the World Income Inequality Database ( https://www.wider.unu.edu/ ) and the World Inequality Database ( https://wid.world/ ), we consider how actual inequality interacts with social class to shape people’s perceptions of income inequality across 64 country-years between 1992 and 2009. We find that overall, perceptions of inequality are higher among the working class and lower among salariats. However, cross-nationally and over time, as the actual level of inequality increases, working classes become less critical toward inequality, whereas salariats become more critical. The actual level of inequality itself has no impact on people’s discontent toward it. This creates a counterbalancing effect that obscures the aggregate relationship between rising inequality and people’s perceptions of it.

Demand for Cashew Nut Exports of Guinea-Bissau (1990-2011): VAR Model Application

This study aimed to estimate via VAR the reaction of the export demand for Guinea-Bissau Cashew nuts to the shocks of world income, exchange rate and of the foreign and domestic prices and of the effects of the Civil War, which occurred in the country from 1990 to 2011. The main results obtained by analyzing the impulse response function and variance decomposition, showed that changes in domestic price and exchange rates don’t explain the external demand for this commodity. External demand responds to changes in global income and foreign price. Moreover, the Civil War of 1998 influenced the foreign demand. In the long run, external demand for cashew nuts doesn’t react to shocks in any of the variables in the model.

WIID Companion (March 2021): integrated and standardized series

This document is part of a series of technical notes describing the compilation of a new companion database that complements the World Income Inequality Database. It aims at facilitating the analysis of inequality as well as progress in achieving the global goal of reducing inequality within and across countries. This new dataset also includes an annual series reporting the income distribution at the percentile level for all citizens in the world, regardless of where they live, since 1950 to present. A previous note described the selection of income distribution series. Since these series may differ across welfare concepts and other methods used, this technical note describes the second stage, constructing integrated and standardized country series. It discusses all the necessary adjustments conducted to construct the final series for each country, with consistent estimates of the distribution of net income per capita over the entire period for which information is available. This is mainly divided into two stages. First, integrating country series by interlinking series that overlap over time, then using a more general regression-based approach.

WIID Companion (March 2021): global income distribution

This document is part of a series of technical notes describing the compilation of a new companion database that complements the UNU-WIDER World Income Inequality Database. It aims at facilitating the analysis of inequality as well as progress in achieving the global goal of reducing inequality within and across countries. This new dataset includes an annual series reporting the income distribution at the percentile level for all citizens in the world, regardless of where they live, from 1950 to the present. The global distribution is displayed along with the country-level information used to produce it. The dataset also includes estimates of various global absolute and relative inequality measures, and the income share of key population groups. All estimates are further disaggregated by the contribution of inequalities within and between countries, as well as by each country’s geographical region and income group. While previous technical notes described the selection of country income distribution series and the integration and standardization process to overcome the heterogeneity in original welfare concepts and other methods, I here describe all the necessary additional steps and assumptions made to construct the new global dataset.

WIID Companion (March 2021): data selection

This document is part of a series of technical notes describing the compilation of a new companion database that complements the World Income Inequality Database (WIID). It aims at facilitating the analysis of inequality as well as progress in achieving the global goal of reducing inequality within and across countries. This new dataset also includes an annual series reporting the income distribution at the percentile level for all citizens in the world, regardless of where they live, from 1950 to the present. This technical note describes the first stage in constructing the first version of the companion datasets: data selection. It provides an overview of the approach followed in the selection of the series from different sources with information on income distribution and inequality that best represent each country and period. It also discusses the general criteria used and their implementation, which are illustrated with a few country examples.

Trade and income distribution: Is natural disaster an actor?

This paper examines the impact of trade on household income inequality (measured using Gini index) under the condition of disaster (measured using various proxies). The paper uses panel regression on a balanced dataset of 48 countries for 2011-2017 to estimate the impacts, with data combined from World Development Indicators, World Income Inequality Database, and World Risk Report. Various robustness checks are also carried out. The results show that trade does not have any impact on inequality on its own. However, with the existence of disaster, the increase of trade leads to higher income inequality. Finally, the effects are stable when disaster is measured using Composite index or Vulnerability component but becomes not clear when using Exposure component, suggesting that it is vulnerability the main factor that moderates the impact of trade on income inequality.

GROWTH AND CONVERGENCE THROUGH TECHNOLOGICAL INTERDEPENDENCE

This paper presents a multi-country version of the Ramsey growth model with cross-country technological interdependence. The results rationalize several stylized facts about growth and convergence. First, individual countries tend to converge toward country-specific balanced growth paths rather than steady-state equilibria. Second, an economy that accounts for a smaller share of the world technology distribution harnesses the “advantages of backwardness” to catch up at a faster speed. Third, countries grow at different rates during the phase of transitional dynamics. However, technological interdependence creates a force toward cross-country convergence in the growth rate and stability of world income distribution in the long run. Finally, cross-country differences in structural characteristics and initial conditions lead to divergences in the level of income per capita.

The Theory of Growth

This chapter reviews the theory of growth. As motivation, it first discusses a range of related facts, including structural change and facts on the ‘new economy. It then launches into the Solow Growth Model (SMG) and related issues. The question of convergence, growth/development accounting, and the world income distribution are discussed next. The later part of the chapter discusses Endogenous Growth Theory(ies) (EGT). After offering an intuitive discussion of the limitations of SMG that EGT aims to rectify, the chapter reviews the AK model, including the processes that underpin it and its properties, and human capital, including its two-sector formulation. Newer EGT models are then reviewed, including models based on expanding product variety and those based on improving quality and product replacement (‘creative destruction’). The chapter concludes with evidence, the policy implications of EGT, and directions of current research.