A world of difference: the global challenge of rising inequality

Martin Wolf:

Bourguignon makes clear that this is a global concern. “After a significant decline in the mid-20th century, followed by a long period of stability, inequality has begun to rise over the last two or three decades in the large majority of developed countries.” he writes. “It has also risen in a number of developing countries for which we have long-term data. This phenomenon is therefore not isolated to a few cases, such as the oft-cited examples of the United States and China.”

Yet, while inequality in the distribution of incomes has risen in most high-income countries, the scale of that increase varies. Atkinson notes that the US and UK have experienced exceptionally large rises in inequality since 1980. Italy, the Netherlands, Canada, Japan and Germany have experienced far smaller rises. France has even experienced a small reduction. The forces driving the increase in inequality in the high-income countries are strong, but cannot be overwhelming. This conclusion is supported by the fact that levels of inequality are also divergent: relatively low in the Nordic countries, far higher in the UK and US, but also in Italy and Japan, with France and Germany in between.