Extremes in income distribution, whether within or among countries, can be found the world over. Within the United States, the richest 10% of the population have nearly 16 times as much income as the poorest 10%. However, such extremes are more muted in Europe. Globally, which of the following groups of countries has the highest inequality?
A. The transition countries of the former USSR and Eastern Europe
B. The industrialized, rich countries
C. The countries of East and South Asia
D. The countries of Latin America and the Caribbean
A. The transition countries of the former USSR and Eastern Europe is not correct.
In the transition countries of the former USSR and Eastern Europe, the richest 10% of the population have 8.4 times as much income as the poorest 10%. In 19 of the 25 countries, the top 10% have less than ten times the average income of the bottom 10%, according to World Bank data.
The big exception to this relatively equal income distribution is Russia, where the richest have almost 15 times the income of the poorest.
B. The industrialized, rich countries is not correct.
The largest industrialized countries have relatively equal income distributions by global standards. The richest 10% have nine times the income of the poorest 10%.
Of the 15 countries in this group for which data are available from the World Bank, only in five do the rich have more than ten times the income of the poor. They are the United States, Israel, Italy, Spain and Greece.
C. The countries of East and South Asia is not correct.
South Asia, with the exception of Nepal, has low levels of inequality. Overall, however, inequality in developing Asia is slightly higher than in the industrialized countries.
In the most unequal country, China, the rich have 22 times the income of the poor. For the region as a whole, though, median inequality is 9.5 times (with India at below nine).
D. The countries of Latin America and the Caribbean is correct.
Income distribution in Latin America is by far the most unequal in the world. Of the 19 countries in the region for which data are available, 18 have income distributions more unequal than in the United States.
In 16 of the 19 countries in the region, income also is more unequally distributed than in China. The median ratio of income of the rich to income of the poor is 37.5 — and in the most unequal country, Bolivia, this ratio hits a staggering 168.
Even in the region with the second-highest level of inequality — sub-Saharan Africa — inequality does not come close to the norm in Latin America. The median level of inequality in sub-Saharan Africa is 16.6 — and in South Africa, where inequality on the continent is greatest, the income of the rich is 33.1 times that of the poor, still below the Latin American median.