True World Income Distribution, 1988 and 1993

The paper derives world income or expenditure distribution of individuals for 1988 and 1993. It is the first paper to calculate world distribution for individuals based entirely on household surveys from 91 countries, and adjusted for differences in purchasing power parity between countries. Measured by the Gini index, inequality increased from 63 in 1988 to 66 in 1993. The increase was driven more by differences in mean incomes between countries than by inequalities within countries. The most important contributors were rising urban-rural differences in China, and slow growth of rural incomes in South Asia compared to several large developed economies.