Authors: Facundo Alvaredo, François Bourguignon, Francisco H. G. Ferreira, Christoph Lakner, and Nora Lustig
Institution: Stone Center Working Paper Series no. 131
Date: July 2026
Abstract:
This paper reviews the evidence on the levels and trends of income and consumption inequality around the world during 2000–2019. It examines how inequality levels vary across countries, whether inequality has been rising more often than declining, and how conclusions depend on the underlying income concept and data source. The analysis draws on two types of evidence: inequality estimates derived from household surveys and contained in harmonized databases such as WIID, PIP, and LIS, and estimates based on distributional national accounts from WID. The analysis pays particular attention to differences between income- and consumption-based measures, the under-coverage of top incomes in household surveys, and the assumptions underlying distributional national accounts. Two findings emerge. First, inequality levels differ substantially not only across countries, but also across concepts and data sources within countries. Measures based on national income generally show higher inequality than those based on household surveys, while consumption-based measures tend to yield lower inequality than income-based ones. Second, trends prove more robust than levels: across sources, inequality was more often declining or stable than increasing during the two decades preceding the pandemic. There is also some evidence of convergence, with declines more common among initially high-inequality countries and increases more frequent among initially low-inequality countries.
