World Inequality Database

THE WORLD INEQUALITY DATABASE (WID.

WORLD) aims to provide open and convenient access to the most extensive available database on the historical evolution of the world distribution of income and wealth, both within countries and between countries.

HISTORY OF WID.world

During the past fi fteen years, the renewed interest for the long-run evolution of income and wealth inequality gave rise to a fl ourishing literature. These projects generated a large volume of data, intended as a research resource for further analysis, as well as a source to inform the public debate on income inequality. To a large extent, this literature follows the pioneering work of Simon Kuznets 1953, and A. B. Atkinson and Alan Harrison 1978, and extends it to many more countries and years.

THE WORLD TOP INCOMES DATABASE (2011)

The World Inequality Database was initially created as the The World Top Incomes Database (WTID) in January 2011 with the aim of providing convenient and free access to all the existing series. Thanks to the contribution of over a hundred researchers, the WTID expanded to include series on income inequality for more than thirty countries, spanning over most of the 20th and early 21st centuries, with over forty additional countries now under study.

The key novelty has been to combine fi scal, survey and national accounts data in a systematic manner. This allowed us to compute longer and more reliable top income shares series than previous inequality databases (which generally rely on self-reported survey data, with large underreporting problems at the top, and limited time span). These series had a large impact on the global inequality debate. In particular, by making it possible to compare over long periods of time and across countries the income shares captured by top income groups (e.g. the top 1%), they contributed to reveal new facts and refocus the discussion on rising inequality.

In principle, all the top income share series respond to the same general methods: following the pioneering work of S. Kuznets (1953), they use income tax data, national accounts, and Pareto interpolation techniques to estimate the share of total income going to top income groups (typically the top decile and the top percentile). However, despite researchers’ best eff orts, the units of observation, the income concepts, and also the Pareto interpolation techniques were never made fully homogeneous over time and across countries. Moreover, for the most part attention has been restricted to the top decile, rather than the entire distribution of income and wealth. These elements pointed to the need for a methodological re-examination and clarifi cation.

FROM INCOME INEQUALITY TO WEALTH INEQUALITY

One reason is the growing recognition that, in seeking explanations for rising income inequality, we need to look not only at wages and earned income but also at income from capital. Income from interest, from dividends, and from rents represents a minority of total personal income, but it is nonetheless signifi cant, especially at the top of the distribution.

In January 2017, with the objective of reaching yet a wider audience of researchers and general public, we released the fi rst version of the more user-friendly website, WID.world, hosting the

World Inequality Database. These changes come along with a new ambition. Thanks to the continuous cooperation of the WID.world Fellows, we pursue our eff orts to expand the database into three major directions. First, we keep expanding the time coverage and the geographical coverage of the database, in particular to the countries of Asia, Africa and Latin America. We also keep updating the database with new observations, as offi cial bodies release the necessary information each year. Additionally, we will progressively include inequality series at the sub-national level whenever possible (series of top income shares for each state in the United States are already available, as well as for urban and rural China).

Next, we plan to provide more series on wealthincome ratios and the distribution of wealth, and not only on income. Third, we aim to off er series on the entire distribution of income and wealth, from the bottom to the top, and not only for top shares.

The overall long-run objective is to be able to produce Distributional National Accounts (DINA), that is, to provide annual estimates of the distribution of income and wealth using concepts of income and wealth that are consistent with the macroeconomic national accounts. This also includes the production of synthetic income and wealth micro-fi les, which will also be made available online.

We also provide a new set of research tools for scholars, journalists, or any interested user in the production of their own inequality datasets. They can be run directly from our website with no prior technical knowledge. Users can also download and install our open-access R-language codes on their computers.

https://wid.world