America may not be moving any closer toward equal distribution of wealth, but around the world the trend is clear: Poverty is disappearing.
Those are the findings of Tomas Hellebrandt and Paolo Mauro, two economists who recently published the paper “The Future of Worldwide Income Distribution.”
They found that emerging-market economies, such as China and India, have generated the greatest reduction in inequality with the wealth they have created over the last decade. Even developing countries, like those found in Latin America, have reduced their inequality greatly, Hellebrandt tells Business Insider.
But population growth is still an issue in many African countries, where babies are born into poverty and cause the distribution to skew.
“If we didn’t see as much population growth in Africa, income inequality would be falling even faster,” Hellebrandt says. “But it’s because we’re adding people to the poorest countries that it’s partly keeping inequality higher.”
That’s actually good news in a way, he concedes, because it leads graphs like the one below to underestimate the true progress.
The two researchers pulled data on countries’ wealth and standardised it according to Purchasing Power Parity — a method of determining the relative value of currencies in different countries.
As their data shows, income inequality has fallen considerably since 2003 and will continue to fall well into the 21st century.