Income Inequality by Country 2022

Since the beginning of time, the divide between the affluent and poor has never been greater. In many nations, the gap between rich and poor has widened. A nation’s economy and politics are harmed when there is a wide income disparity.

Some examples of these are the rise of political polarization, anti-wealth sentiments, slower GDP growth, less economic mobility, higher poverty rates, and larger family debt.

The Gini Index

Gini coefficient and Gini index are measures of the distribution of a country’s population’s income or wealth. The Gini coefficient, developed in 1912 by Italian statistician Corrado Gini, is the most widely used indicator of inequality.

Using the Gini coefficient, we can see how earnings are distributed across different income tiers.

If the coefficient is set to 0, then there is perfect equality, and if it is set to 1, then there is perfect inequality. On the other hand, the Gini coefficient would be zero in a nation where everyone earns the same amount of money.

However, the coefficient would be 1 if one person made all the money and everyone else had nothing.

The Lorenz curve is used to calculate the Gini coefficient. The Lorenz curve depicts the percentages of the population based on income or wealth, whichever is being measured, on the horizontal axis of the graph.

The vertical axis shows the total wealth or income of the population as a percentage of the population. 

The Gini coefficient may be used to analyze the distribution of wealth and income in a nation, but it is not an absolute measure of its riches. For example, a country’s Gini coefficient might be the same regardless of its wealth.

Due to a lack of trustworthy and up-to-date GDP and income statistics, the Gini coefficient may overestimate income disparity. According to the latest current statistics, these nations have the greatest levels of income disparity.

• South Africa 62.7
• Namibia – 59.2
• Zambia – 58.1
• Mozambique – 53.9
• Botswana – 53.4
• Brazil – 53.1
• Angola – 51.3
• Colombia – 51
• Zimbabwe – 50.3
• Panama – 49.7

The nations with the lowest levels of income inequality are those listed in the opposite column:

• Azerbaijan – 22.5
• Slovenia – 24.4
• Slovakia – 24.8
• Moldova – 24.8
• Czechia – 24.8
• Belarus – 25.1
• United Arab Emirates – 26
• Iceland – 26.4
• Ukraine – 26.7
• Belgium – 27.2

As per the U.S. Census Bureau, the Gini coefficient of the United States is.484, the highest it has been in 50 years. The Gini coefficient for the United States is the highest among the G7 countries.

Also See: Highest Taxed Countries 2022

In the United States, the wealthiest one percent of earnings take home 40 times as much money as the poorest ninety percent. For a family of four, the poverty line in the United States is $10 an hour.