Visualizing global income distribution over 200 years
Has the world become more unequal?
With COVID-19 disrupting societies, and especially low-income countries, the social and economic progress made over the past decade is at risk of being reversed. And with rising living costs and inflation around the world, experts warn that global income inequality has increased.
But the good news is that there has been a significant increase in absolute income in many poorer countries during the last century. And although work remains in place, poverty levels have declined dramatically despite huge inequality.
This infographic from Our World in Data looks at three periods over the past two centuries, to analyze historical trends in global income distribution. It uses economic data from 1800, 1975 and 2015 compiled by Hans and Ola Rosling.
For the global income projections, data was collected by country in three key variables:
- GDP per capita
- Gini coefficient, which measures income inequality by statistical distribution
Daily income was measured in a hypothetical “international-$” currency, equivalent to one US dollar in the US in 2011, to allow for comparable income across time periods and countries.
Historical Patterns in Global Income Distribution
in 1800, over 80% lived in what we today consider to be extreme poverty.
At that time, only a small number of countries—mainly Western European countries, Australia, Canada, and the United States—see meaningful economic growth. In fact, research shows that most places around the world saw modest economic growth (only 0.04% annually) between 1 CE and 1800 CE.
By 1975, the global income distribution became bimodal, The majority of citizens in developing countries lived below the poverty line, while the majority lived above it in developed countries, whose income was approximately 10 times above average. Growth was unusually rapid in developed countries after WWII.
Fast forward 40 years to 2015 and the world income distribution changed again. As incomes in poor countries grew faster than in developed countries, many people were lifted out of poverty. Poverty declined between 1975 and 2015 faster than at any other time. Nevertheless, huge inequality remained.
A Tale of Different Economic Outputs
Even as global income distribution has begun, economic output is moving in the opposite direction.
As the interactive chart above shows, GDP per capita was pretty much the same as in the 19th century, when it was about $1,100 per capita on a global basis. In these times, despite many people living below the poverty line, there was little money to move around the world.
Today, the global average GDP per capita is . sits close to $15,212 Or about 14 times as much, but it’s not evenly distributed.
At the highest end of the spectrum are Western and European countries. Strong economic growth, greater industrial production and adequate legal institutions have helped underpin the high GDP per capita. Meanwhile, countries with the lowest median incomes have not seen the same levels of development.
This highlights that poverty, and economic prosperity, is greatly affected by where one lives.