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How about Inequality (Ginis and Lorenz):World and Brazil?

* 7.2

Recap: Gini Index and Lorenz Curve

2

Graph from the Lorenz Curve L(P)

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Lorenz curves 1988 and 2011 - Global

3

0

10

20

30

40

50

60

70

80

90

100

0 10 20 30 40 50 60 70 80 90 100

There is not Lorenz dominance of 2011 wrt 1988

1988 2011 perfect equality

2011

Source: Milanovic

Lorenz curves 2008 and 2011 - Global

4

0

10

20

30

40

50

60

70

80

90

100

0 10 20 30 40 50 60 70 80 90 100

There is Lorenz dominance of 2011 wrt 2008

2008 2011 perfect equality

2011

Source: Milanovic

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Generalized Lorenz curves 1988 and 2008 - Global

5Source: Milanovic

There is generalized Lorenz dominance of 2008 wrt 1988

0

500

1000

1500

2000

2500

3000

3500

4000

4500

0 10 20 30 40 50 60 70 80 90 100

Ave

rage

cu

mu

lati

ve p

er c

ap

ita

inco

me

Cumulative percentage of people

2008

1988

Generalized Lorenz Curve L(μ,P) = μ L(P)

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

Source: Milanovic (2016), Chapter 1

2 2 2 2 2 2

3 3

5

6

7 7

9 9

12

0

2

4

6

8

10

12

14

CYP DEU IRL KOR NLD TWN FRA NOR GBR JPN CAN LUX CHE SGP USA

Countries with more than 1% of their population in top global percentile (above $PPP 72,000 per capita in 2008 prices)

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Branko Milanovic

30

35

40

45

50

55

60

65

70

75

1800 1850 1900 1950 2000 2050

Global Gini 1820-2011

B-M series

L-M and M series

With full adjustment (allocation to the top 10% + Pareto) Gini decline almost vanishes

Branko Milanovic

Survey data only

64

66

68

70

72

74

76

78

80

1988 1993 1998 2003 2008

Global Gini

Top-heavy allocation of the gap + Pareto adjustment

Summary_data.xls

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Inequality Across Nations - Unweighted

Overall Inequality

.45

.55

.65

.75

Gin

i Co

effi

cien

t

1950 1960 1970 1980 1990 2000 2010year

China Effect ChIndia Effect

Source: Milanovic (2011)

Inequality Across Nations – Weighted by Population

Evolution of World Income InequalityDifferent Concepts

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

Source: Milanovic (2016), Chapter 1

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Source: Milanovic (2011) and Neri (2011)

Brazil is a small World

1950 1960 1970 1980 1990

2013

2000

2001Year

Gin

iCo

effi

cien

t

.75

.65

.55

.45

0.535

0.5810.589

0.607

0.5144

0.539

0.594

China Effect ChIndia Effect

Inequality Across Nations

Falling in Brazil but 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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Ginis in 1988 and 2011 (population-weighted countries)

twoway (scatter gini gini_88 if bin_year==2011 & keep==1 & mysample==1 & group==1 [w=totpop], text(50 55 "MEX") text(57 60 "BRA") text(42 34 "USA") text(23 30 "IND-R") text(46 36 "NGA") text(39 24 "CHN-U") text(45 30 "CHN-R") ylabel(20(10)60)) (function y=x, range(20 60) legend(off) ytitle(Gini in 2011) xtitle(Gini in 1988))Using final11\combine88_11.dta

Branko Milanovic

MEX

BRA

USA

IND-R

NGA

CHN-U

CHN-R

20

30

40

50

60

Gin

i in

201

1

20 30 40 50 60Gini in 1988

0

10

20

30

40

50

60

1000 10000 100000

Gin

i of

dis

po

sab

le p

er c

apit

a in

com

e

GDP per capita (in 1990 international dollars; Maddison)

Kuznets relationship for the UK, 1688-2010

1867

1978

196

1993

168

2010

1913

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0

10

20

30

40

50

60

1000 10000 100000

Gin

i of

dis

po

sab

le p

er c

apit

a in

com

e

GDP per capita (in 1990 international dollars; Maddison)

Kuznets relationship for the United States, 1774-2013

1860

1929

2013

194

1979

1774

1933

Branko Milanovic

0

0,05

0,1

0,15

0,2

0,25

0,3

0,35

Urb

an G

ini

Year

Urban Gini in China: 1981-2014 (based on official household surveys)

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Where are now China and the US?

China 2013United States 2013

GDP per capita

Gini First Kuznets wave Second Kuznets wave

0,6

22

7

0,5

88

4

0,6

35

1

0,5

81

80

,60

37

0,6

00

20

,60

18

0,5

95

2

0,5

53

5

0,5

34

4

0,5

15

10

,51

44

0,50

0,52

0,54

0,56

0,58

0,60

0,62

0,64

0,66

19

76

19

78

19

80

19

82

19

84

19

86

19

88

19

90

19

92

19

94

19

96

19

98

20

00

20

02

20

04

20

06

20

08

20

10

20

12

20

14GINI HOUSEHOLD PER CAPITA INCOME – ALL SOURCES

Source FGV Social from PNAD/IBGE microdata

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GINI - EARNINGS INEQUALITY

Source FGV Social from PME/IBGE microdata per capita labour 15 to 60 years

0,54

0,56

0,58

0,6

0,62

0,64d

ez/0

2

mai

/03

ou

t/0

3

mar

/04

ago

/04

jan

/05

jun

/05

no

v/0

5

abr/

06

set/

06

fev/

07

jul/

07

dez

/07

mai

/08

ou

t/0

8

mar

/09

ago

/09

jan

/10

jun

/10

no

v/1

0

abr/

11

set/

11

fev/

12

jul/

12

dez

/12

mai

/13

ou

t/1

3

mar

/14

ago

/14

jan

/15

jun

/15

no

v/1

5

Lorenz Dominance

Source FGV Social from PNAD/IBGE microdata

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Inequality by Municipalities Gini Index of Per Capita Incomeby Municipality - 2000

Source: Demographic Census/IBGE microdata

2000

2010

Inequality by Municipalities Gini Index of Per Capita Incomeby Municipality - 2000

Source: Demographic Census/IBGE microdata

Inequality fell in 80% of the 5500 BrazilianMunicipalities

Inequality fell in 83% of LatinAmerica 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

Ineq

ual

ity

(Gin

i)

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 curves orKuznets Waves?Milanovic (2016)

Cornia (2014) on CEDLAS & CEPAL

A Visão da Nova Década - Desigualdade da Renda Per Capita

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Branko Milanovic

0

10

20

30

40

50

60

70

0 1000 2000 3000 4000 5000 6000 7000 8000

Gin

i

GDP per capita (in 1990 international dollars)

The Kuznets relationship for Brazil, 1839-2013

2013

1991

1972

1930

1885