Distribution of Income ( Wealth ) and Ginis around the World, Brazil - PDF document

16/02/2017 *7 Social Economics and Public Policy – Marcelo Neri Distribution of Income ( Wealth ) and Ginis around the World, Brazil ( & Latin America ) Marcelo Neri FGV Social/CPS and EPGE/FGV *Reference: Milanovic (2016) “Global Inequality” Chapter 1 *Video Milanovic Peterson Institute from 3:20 to 26:25 minutes ://www.youtube.com/watch?v=zt8h0GC2KdY ***discussion Milanovic and Piketty Paris School of Economics - first 20 minutes https://www.youtube.com/watch?v=-PcdQld7Rww Obs: *means obligatory reference ***suggested optional reference Definition: The Growth Incidence Curve (GIC) refers to the growth rate of income for every quantile (percentile, vintile, decile etc) of the income distribution between two points in time. 1.1 Change in real income between 1988 and 2008 at various percentiles of global income distribution (2005 international dollars) Source: Milanovic (2016), Chapter 1 1

16/02/2017 Real income change at various percentiles of global income distribution between 1988 and 2008 (in percent) Source: Milanovic (2016), Chapter 1 4 2

16/02/2017 1.2 ( Variation of 1.2) Absolute income gains 1988 and 2008 (in percent) *See discussions on: Global Data (Excursus 1.1) Absolute Inequality (Excursus 1.2) Wealth distribution 5 Source: Milanovic (2016), Chapter 1 1.3 Real income growth over 1988-2008 and 1988-2011 (based on 2011 PPPs) Source: Milanovic (2016), Chapter 1 3

16/02/2017 1.4 Global income distribution in 1988 and 2011 Source: Milanovic (2016), Chapter 1 Global Income Distribution 2011 (2005 international dollars) Source: Lakner and Milanovic 2015 4

16/02/2017 1.5 Distribution of World Population by Real GDP per capita of the country in which people live (2005 international dollars) Source: Milanovic (2016), Chapter 1 1.6 Real per capita income of the 2nd income decile in the US and the 8th urban income decile in China between 1988 and 2011 Source: Milanovic (2016), Chapter 1 5

16/02/2017 1.7 Percentage of National Population in the Global Top 1% (2008) Source: Milanovic (2016), Chapter 1 Table 1.1 Global Top 1% Shares in Global Income and Global Wealth Source: Milanovic (2016), Chapter 1 6

16/02/2017 Wealth of Hyper-wealthy Individuals Relative to World GDP, 1987 and 2013 Source: Milanovic (2016), Chapter 1 Regional composition of global wealth distribution 2014 Source: James Davies, Rodrigo Lluberas and Anthony Shorrocks, Credit Suisse Global Wealth Databook, 2014 7

16/02/2017 Evolution of World Income Inequality Different Concepts China Effect ChIndia Effect .75 Overall Inequality .65 Gini Coefficient Inequality Across Nations – Weighted by Population .55 Inequality Across Nations - Unweighted .45 1950 1960 1970 1980 1990 2000 2010 year Source: Milanovic (2011) Three concepts of inter-national income inequality, 1952-2013 Source: Milanovic (2016), Chapter 1 8

16/02/2017 Income Distribution Brazilian Per Capita GDP (PPP) was Relative to the World 93.7% of the World GDP in 2012 100 Percentile of the World Income Distribution 90 US 80 70 Russia 60 Brazil China 50 India 40 30 20 10 1 1 25 50 75 100 Each Country Source: Milanovic (2011) and Neri (2014) Visualizing Global Inequality Source: Milanovic (2006) 9

16/02/2017 Brazilian Per capita GDP PPP has Brazil is a small World grown 3.5% agains 3.6% of the world between 2002 e 2012 .75 China Effect ChIndia Effect Inequality Across Nations .65 Gini Coefficient 0.607 0.589 0.594 0.581 .55 0.539 0.535 0.5144 Falling in Brazil but still the 18th highest in .45 155 countries 1950 1960 1970 1980 1990 2000 2001 2013 Year Source: Milanovic (2011) and Neri (2011) Gini Coefficients for Selected Countries Source: Organization for Economic Cooperation and Development (OECD), Income Distribution Database. 10

16/02/2017 Elusive Curves Source: World Income Distribution database. Earnings Inequality GINI of Per Capita Household Income* 0,62 0,6037 0,6018 0,6015 0,6002 0,5996 0,60 0,5952 0,5934 0,5886 0,5823 0,5818 0,58 0,5701 0,5674 0,5604 0,56 0,5535 0,5437 0,5397 0,54 0,529 0,5259 0,525 0,52 0,5144 0,5151 0,50 1992 1993 1995 1996 1997 1998 1999 2001 2002 2003 2004 2005 2006 2007 2008 2009 2011 2012 2013 2014 2015 Source: FGV Social from PNAD/IBGE microdata 11

16/02/2017 Gini Index of Per Capita Income Inequality by Municipalities by Municipality - 2000 2000 Source: Demographic Census/IBGE microdata Gini Index of Per Capita Income Inequality by Municipalities by Municipality - 2000 Inequality fell in 83% of Latin America countries and 40% of World Countries 2010 Inequality fell in 80% of the 5500 Brazilian Municipalities Source: Demographic Census/IBGE microdata 12

16/02/2017 Long Run & Regional Perspective Latin America Latina last 3 Decades Inequality of Per Capita Income (Gini) 62 0.607 0.592 6 0.589 0.581 0,58 Inequality (Gini) 0,56 0.560 Kuznets Waves? Milanovic (2016) 0.543 0.535 0,54 0.523 0,52 0,5 0,48 1960 1970 1979 1990 2001 2007 2009 2013 Year Source: CPS;FGV from PNAD, PME and Census / IBGE microdata and Langoni (1973) Is Inequality Still Falling? in Latin America? Source: PNAD/IBGE microdata # Not a statistically significant change with respect to 2011 Cornia (2014) on CEDLAS & CEPAL data for 11 countries: Argentina, Bolivia, Brazil, Colombia, Costa Rica, Ecuador, El Salvador, Mexico, Panama, Peru and Uruguay . The dotted line includes Uruguay The solid lines excludes it. 13

16/02/2017 A Visão da Nova Década - Desigualdade da Renda Per Capita Fonte: SAE a partir dos microdados da PNAD/IBGE Earnings Inequality Has labor income inequality stopped falling? GINI of Per Capita Labor Income* Inequality Index, December 2002 to February 2016 0,64 0,62 0,6 0,58 0,56 0,54 dez/02 mai/03 out/03 mar/04 ago/04 jan/05 jun/05 nov/05 abr/06 set/06 fev/07 jul/07 dez/07 mai/08 out/08 mar/09 ago/09 jan/10 jun/10 nov/10 abr/11 set/11 fev/12 jul/12 dez/12 mai/13 out/13 mar/14 ago/14 jan/15 jun/15 nov/15 Source: FGV Social from PME/IBGE (2002-2014) microdata *Per Capita Household Labor Income - 15 to 65 Years 14

16/02/2017 Earnings Inequality GINI of Per Capita Labor Income* Gini 0,585 0,58152 0,58 0,57862 0,57847 0,5779 0,57643 0,57633 0,57554 0,57491 0,57475 0,575 0,57323 0,57307 0,57303 0,57242 0,57235 0,57187 0,57141 0,57 0,56832 0,56778 0,565 0,56365 0,56 0,555 0,55 2012 1T 2012 2T 2012 3T 2012 4T 2013 1T 2013 2T 2013 3T 2013 4T 2014 1T 2014 2T 2014 3T 2014 4T 2015 1T 2015 2T 2015 3T 2015 4T 2016 1T 2016 2T 2016 3T Source: FGV Social from PME/IBGE (2002-2014) microdata *Per Capita Household Labor Income - 15 to 65 Years References & Links *Reference: Milanovic (2016) “Global Inequality” Chapter 1 *Video Milanovic Peterson Institute from 3:20 to 26:25 minutes ://www.youtube.com/watch?v=zt8h0GC2KdY Thanks! ***discussion Milanovic and Piketty Paris School of Economics - first 20 minutes https://www.youtube.com/watch?v=- PcdQld7Rww Obs: *means obligatory reference ***suggested optional reference 15