Global Inequality Report is a report by the World Inequality Lab at the Paris School of Economicsthat provides estimates of global income and wealth inequality based on the most recent findings complied by the World Wealth and Income Database (WID).
WID, also referred to as WID.world, is an open source database, that is part of an international collaborative effort of over a hundred researchers in five continents.
The World Inequality Report includes discussions on potential future academic research as well as content useful for public debates and policy related to economic inequality.
The first report, entitled World Inequality Report 2018, which was released on December 14, 2017 at the Paris School of Economics during the first WID.world Conference, was compiled by Facundo Alvaredo, Lucas Chanel, Thomas Piketty, Emmanuel Saez, and Gabriel Zucman based on WID data.
The 300-page report cautions that since 1980, around the globe, there has been an increase in the gap between rich and poor.
In Europe, the increase in inequality increased more moderately while in North America and Asia, the increase was rapid. In the Middle East, Africa, and Brazil, income inequality did not increase, but remained at very high levels.
How the report has highlighted the inequality in the report w.r.t. India?
There are two other interesting parameters which are spoken about here in the report.
The first is cumulative growth per adult between 1980 and 2014.
Given the low base, growth was 223 per cent for this period in case of India.
For the bottom 50 per cent it was 107 per cent and 112 per cent for the middle 40 per cent, while for the top 10 per cent it was 469 per cent.
More alarming is the income growth for the top 1 per cent where it was 857 per cent. This is probably a sharper measure of inequality as it speaks of growth in income over various groups where the richest has witnessed the highest increase over higher base numbers compared with the other categories.
The second metric is the share of income growth of various classes for the period 1980-2016.
The bottom 50 per cent had a share of just 11 per cent, which is not really out of place with other geographies except the US where it is 2 per cent.
The middle 40 per cent had 23 per cent, one of the lowest across regions like the World, the US, Europe, and China.
The top 10 per cent had share of 66 per cent (same as in the US but much lower than in Europe with 48 per cent and China 43 per cent) and top 1 per cent, 28 per cent.
This talks of which groups have gained the most on account of cumulative growth.
More about inequality in India
The report noted that the temporary end to the publication of tax statistics between 2000–2010 by Indian government highlights the need for more transparency on income and wealth statistics that track the long-run evolution of inequality.
“The structural changes to the economy along with changes in tax regulation, appear to have had significant impact on income inequality in India since the 1980s.
In 1983, the share of national income accruing to top earners was the lowest since tax records started in 1922: the top 1 per cent captured approximately 6 per cent of national income, the top 10 per cent earned 30 per cent of national income, the bottom 50 per cent earned approximately 24 per cent of national income and the middle 40 per cent just over 46 per cent, but by 1990, these shares had changed notably with the share of the top 10 per cent growing approximately 4 percentage points to 34 per cent from 1983, while the shares of the middle 40 per cent and bottom 50 per cent both fell by 2 percentage points to around 44 per cent and 22 per cent, respectively,” the report said.
India introduced an individual income tax with the Income Tax Act of 1922, under the British colonial administration. From that date up to the turn of the twentieth century, the Indian income tax department produced income tax tabulations, making it possible to track the long-run evolution of top incomes in a systematic manner, it said.