Worldwide Income Inequality
Income inequality seems to be increasingly prevalent in today’s society. There has been a great increase of income inequality in the US since 2008. Additionally, the top 1% of the world has 43% of the global wealth. What’s even scarier is that the top .1% of the population has 25% of the global wealth of the world. To make matters worse, the bottom 50% of the world has 1% of the global wealth.
There’s a lot of ways to measure income inequality, but for this project I chose to investigate the Gini Index. You might be thinking, why is the Gini Index a good measure to use when looking at income inequality? The World Bank Data defines the Gini index by stating that the, “Gini index measures the extent to which the distribution of income (or, in some cases, consumption expenditure) among individuals or households within an economy deviates from a perfectly equal distribution. A Lorenz curve plots the cumulative percentages of total income received against the cumulative number of recipients, starting with the poorest individual or household. The Gini index measures the area between the Lorenz curve and a hypothetical line of absolute equality, expressed as a percentage of the maximum area under the line. Thus a Gini index of 0 represents perfect equality, while an index of 100 implies perfect inequality.” Using the Gini Index, what’s income inequality like around the world? How has it changed over time?
To investigate income inequality, I used Gini Index data from The World Bank Data to look at the historical trends. I started by cleaning up the data and narrowing the countries down to the ones with the most data available. This resulted data from 1992–2019 in forty countries, these countries being Argentina, Bolivia, Brazil, Columbia, Costa Rica, Dominican Republic, Honduras, Thailand, Ukraine, Uruguay, Ecuador, Turkey, Panama, Paraguay, El Salvador, Georgia, Indonesia, Peru, Belarus, Armenia, Kyrgyz Republic, Belgium, Czech Republic, Denmark, Sweden, United States, Austria, France, Luxembourg, Spain, Finland, Greece, Norway, Kazakhstan, Russian Federation, Germany, United Kingdom, Ireland, Italy, and Moldova. Then, I created some visualizations to better interpret the data. This first line graph shows all forty countries and their Gini indexes from 1992–2019.
After looking at this graph, I decided to graph each country individually to get a better look at the trends for each individual country.
I also wanted to look at the general worldwide trends, so I grouped the data by year and aggregated on the value to calculate the worldwide average each year. I used this aggregate data to create another line graph. This graph showed a worldwide decline during most of the 2000s and 2010s, as well as a rise that started in 2018. The index at its lowest was around 0.37, and at its highest around 0.47.
After seeing the world aggregated by year graph, I thought a scatterplot that showed the overall historical average of each country would be helpful as well. This plot shows the huge differences between countries and paints a picture of what each countries faces in terms of income inequality.
Lastly, I investigated the percent change of all these countries from 1992–2019. There were some interesting findings here. Out of the 40 countries, only 15 had an overall increase. Moldova had the biggest decrease at -30.4%, Luxembourg had the biggest positive increase at 31.6%, and France had the smallest amount of change at .3%.
The worldwide income inequality overall is somewhat alarming. With the top .1% of the population holding 25% of the global wealth, income inequality is a sad reality. The visualizations I created show how a lot of the world has very prevalent income inequality. While some countries are actually improving, others, including the US, show little promise and income inequality continues to worsen. As a whole worldwide, in the last few years, income inequality is once again on the rise.
