around the World, Brazil (& Latin America) - CPS/FGV

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Distribution of Income (Wealth ) and Ginis around the World, Brazil ( & Latin America )

Marcelo Neri FGV Social/CPS and EPGE/FGV

*Reference: Milanovic (2016) “Global Inequality” Chapter 1

*Video Milanovic Peterson Institute from 3:20 to 26:25 minutes

://www.youtube.com/watch?v=zt8h0GC2KdY

***discussion Milanovic and Piketty Paris School of Economics - first 20 minutes

https://www.youtube.com/watch?v=-PcdQld7Rww Obs: *means obligatory reference

***suggested optional reference

*7 Social Economics and Public Policy – Marcelo Neri

1.1 Change in real income between 1988 and 2008 at various

percentiles of global income distribution (2005 international dollars) Definition: The Growth Incidence Curve (GIC) refers to the growth rate of income for every quantile (percentile, vintile, decile etc) of the income distribution between two points in time.

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Real income change at various percentiles of global income distribution between 1988 and 2008 (in percent)

Source: Milanovic (2016), Chapter 1

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5

1.2 (Variation of 1.2)Absolute income gains 1988 and 2008 (in percent)

*See discussions on:

Global Data (Excursus 1.1) Absolute Inequality (Excursus 1.2) Wealth distribution

1.3 Real income growth over 1988-2008 and 1988-2011 (based on 2011 PPPs)

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1.4 Global income distribution in 1988 and 2011

Global Income Distribution 2011 (2005 international dollars)

Source: Lakner and Milanovic 2015

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1.5 Distribution of World Population by Real GDP per capita of the country in which people live (2005 international dollars)

1.6 Real per capita income of the 2nd income decile in the US and the 8th urban income decile in China between 1988 and 2011

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1.7 Percentage of National Population in the Global Top 1% (2008)

Table 1.1 Global Top 1% Shares in Global Income and Global Wealth

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Wealth of Hyper-wealthy Individuals Relative to World GDP, 1987 and 2013

Source: James Davies, Rodrigo Lluberas and Anthony Shorrocks, Credit Suisse Global Wealth Databook, 2014

Regional composition of global wealth distribution 2014

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Inequality Across Nations - Unweighted

Overall Inequality

.45.55.65.75Gini Coefficient

1950 1960 1970 1980 1990 2000 2010

year

China Effect ChIndia Effect

Source: Milanovic (2011)

Inequality Across Nations – Weighted by Population

Evolution of World Income Inequality Different Concepts

Three concepts of inter-national income inequality, 1952-2013

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US

China Brazil

Russia

India

1 10 20 30 40 50 60 70 80 90 100

Percentile of the World Income Distribution

1 25 50 75 100

Each Country

Source: Milanovic (2011) and Neri (2014)

Income Distribution

Relative to the World

Brazilian Per Capita GDP (PPP) was 93.7% of the World GDP in 2012

Source: Milanovic (2006)

Visualizing Global Inequality

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Source: Milanovic (2011) and Neri (2011)

Brazil is a small World

1950 1960 1970 1980 1990

2013 2000

Year 2001

GiniCoefficient

.75

.65

.55

.45

0.535

0.581 0.589 0.607

0.5144 0.539 0.594 China Effect ChIndia Effect

Inequality Across Nations

Falling in Brazilbut still the 18th highest in 155 countries Brazilian Per capita GDP PPP has grown 3.5% agains 3.6% of the world between 2002 e 2012

Gini Coefficients for Selected Countries

Source: Organization for Economic Cooperation and Development (OECD), Income Distribution Database.

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Elusive Curves

Source: World Income Distribution database.

GINI of Per Capita Household Income*

Earnings Inequality

0,5818 0,6037 0,6002 0,6018 0,6015 0,5996 0,5934 0,5952 0,5886 0,5823 0,5701 0,5674 0,5604 0,5535 0,5437 0,5397 0,529 0,5259 0,525 0,5151 0,5144

0,50 0,52 0,54 0,56 0,58 0,60 0,62

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Inequality by Municipalities

Gini Index of Per Capita Income by Municipality - 2000

Source: Demographic Census/IBGE microdata

2000

2010

Inequality by Municipalities

Gini Index of Per Capita Income by Municipality - 2000

Inequality fell in 80%

of the 5500 Brazilian Municipalities

Inequality fell in 83% of Latin America countries and 40% of World Countries

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0.535

Inequality of Per Capita Income (Gini)

Source: CPS;FGV from PNAD, PME and Census / IBGE microdata and Langoni (1973)

0.581 0.589

0.607 0.592

0.560 0.543

0.523

1960 1970 1979 1990 2001 2007 2009 2013

Year

Inequality(Gini)

0,5

0,48 0,52 0,54 0,56 0,58 6 62

Long Run & Regional Perspective

Latin America Latina last 3 Decades

Kuznets Waves?

Milanovic (2016)

in Latin America?

Is Inequality Still Falling?

Source: PNAD/IBGE microdata

# Not a statistically significant change with respect to 2011

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Fonte: SAE a partir dos microdados da PNAD/IBGE

GINI of Per Capita Labor Income*

Earnings Inequality

Inequality Index, December 2002 to February 2016

Has labor income inequality stopped falling?

0,54 0,56 0,58 0,6 0,62 0,64

dez/02 mai/03 out/03 mar/04 ago/04 jan/05 jun/05 nov/05 abr/06 set/06 fev/07 jul/07 dez/07 mai/08 out/08 mar/09 ago/09 jan/10 jun/10 nov/10 abr/11 set/11 fev/12 jul/12 dez/12 mai/13 out/13 mar/14 ago/14 jan/15 jun/15 nov/15

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GINI of Per Capita Labor Income*

Earnings Inequality

Source: FGV Social from PME/IBGE (2002-2014) microdata

*Per Capita Household Labor Income - 15 to 65 Years

0,58152 0,57643 0,57554 0,57235 0,57633 0,57847 0,57187 0,56832 0,57141 0,57323 0,57491 0,56365 0,56778 0,57242 0,57307 0,57303 0,5779 0,57475 0,57862

0,55 0,555 0,56 0,565 0,57 0,575 0,58 0,585

2012 1T 2012 2T 2012 3T 2012 4T 2013 1T 2013 2T 2013 3T 2013 4T 2014 1T 2014 2T 2014 3T 2014 4T 2015 1T 2015 2T 2015 3T 2015 4T 2016 1T 2016 2T 2016 3T

Gini

References & Links

Thanks!

*Reference: Milanovic (2016) “Global Inequality” Chapter 1

*Video Milanovic Peterson Institute from 3:20 to 26:25 minutes

://www.youtube.com/watch?v=zt8h0GC2KdY

***discussion Milanovic and Piketty Paris School of

Economics - first 20 minutes

https://www.youtube.com/watch?v=- PcdQld7Rww

Obs: *means obligatory reference

***suggested optional reference