- The World Bank estimates that global inequality doubled between l820 and 1990, while the contribution of inter-country inequality increased from just 10% to more than 60% over the same period. (2005 http://news.bbc.co.uk/1/hi/business/4252308.stm)
From 'Globalisation and its consequences' by Romily Greenhill, in Real World Economic Outlook, nef 2003
- nice summary: "In a market economy people should be rewarded for showing entrepreneurship and taking risks and that inevitably creates limited inequalities. However, inequalities increase exponentially in a system where money is made from money. The more money a person or country has, the more money is made. Conversely, people and countries without a bed-rock of capital to start off with are getting priced out of the market, and are forced further into debt just in order to survive." p33
- We have data in distribution of income but not distribution of wealth. "there is a real paucity of relaible global data on inequalities in wealth. Institutions such as the Wolrd Bank, the IMF and the UN have let us down badly; they do not collect the required figures, arguing that it would be too difficult to provide an accurate assessment. But in our view, there may also be another motive; if the numbers were made available, the polarization in wealth would be too unpalatable for words."
- World Wealth Report 2008:
source: http://www.us.capgemini.com/worldwealthreport08/wwr_pressrelease.asp?ID=699
- I followed the source because Greenhill reported on it in 2003. Then, 5 years ago, there were 7.1 million HNWIs (now 10.1m) with total assets of $26.2 trillion (now $40.7 trn).
- The 2008 report is the 12th annual report. So this is a great source for mapping the rise in wealth for a tiny majority of people in the world from 1996 - 2008.
- How does it feel to be a HNWI? Are the super rich happier than us?
there has been little or no careful investigation into the actual extent of wealth inequalities in the world. Part of the problem has been defining wealth; another has been the relative paucity of data that would allow for cross-country comparisons and assessments of wealth distribution over time within countries. (December 2006)
Davies J et al 2008
p4, table 1 - fantastic data set showing % share of ownership of the national wealth by different deciles in various countries. Source - Davies et al (2007: Appendix IIC)
In the UK: the lowest 50% own 5% of the national wealth. The lowest 75% own 25%, and the lowest 90% own 44%. The top 10% own 56% of the national wealth, which can be broken down ing 44% for the top 5%, 31% for the top 2% and 23% for the top 1%.
Countries with the top 10% with a % higher than the UK are: Denmark (76.4%), France, 61%, Indonesia (65.4%), Switzerland 71.3%) and USA (69.8%).
(again - what is the impact of high wealth on everybody else?)
"Globally, wealth is more concentrated than income both on an individual and national basis."
Regional Trends
- In 2001, HNWIs in Latin America saw their wealth grow by 8%, despite the crash that ruined the economic situation for most people. (Greenhill 2003:33)
- looks like UK is second most unequal country out of US and EU14 (is this The EU14?)
- and our incomes have become more unequal than any other country over the 20 years between 1980 and 2000 (or so...). Only Ireland, France, Netherlands and Denmark became more equal in this period. Why is that?
The US
- "In the US, almost all of the increase int eh stock of financial assets since 1983 has accrued to the top 10% of the population, whil virtually all the increase in debt has accrued to the bottom 90%." - quote + graphs from Greenhill / nef 2003:34-5
I like this graph from Bernard Lietaer's The Future of Money (2001:114) for its more illustrative communication of what the figures mean. Growth in dollars owned or earned by the top 10% hits at one level; growth in kids sleeping rough hits at another. (Data source: 'Report to Congress: Education for Homeless Children and Youth Program [Stewart B. McKinney Homeless Assistance Act Title VII, Subtitle B] July 1995).- 'the top 1% of Americans has now more personal wealth than the bottom 92% combined.' 'The assets of the top 500 families in the US rose from $2.5 to $5 trillion between 1983 and 1989.' 'The top three billionaires own now more wealth than the combined GDPs of 48 poorest countries in the world.' Lietaer quoting a vareity of sources, p54-5
- There are a lot of these sound bites. I would like to find / create some more systematic graphs showing the distribution of wealth in say, the world, the UK, the US, and other countries (which? By what criteria? historical reasons - different proportions of biz models - studying different causes and effects - learn more) and to have series' of graphs or overlayed bar charts showing distribution in, say, 1980, 1990, 2000, 2008 (why not go back before 1980? Time periods with good reasons.)
The UK
- "Excluding household wealth, the bottom 50% of the population now owns only 1% of the [national] wealth; in 1976, they had 12 per cent." (Greenhill 2003:34 using data from Inland Revenue - more precise source not given).
- Cost of housing benefit has risen from £5.4bn in 1988 to £20bn now. (What's inflation in this period?) - Guardian letter from chair of Zacchaeus 2000 Trust
- "Up. Up. Up. Child poverty, pensioner poverty, inequality" - Guardian headline 11.06.08. Figures from the DWP showed that the incomes of the poorest 20% in Britain fell by 1.6% between 2005 and 2007, while those of the richest households rose by 0.8%.
- "the growing importance of the City to the economy has resulted in teh slice of national income going to the richest fifth of households rising from 40.9% to 42.6% since 1997 while the share taken by the poorest families has dropped from 7.7% to 7.2%" (which actually sounds relatively stable to me, over a 10 year period...). "The IFS said inequality in Britain was equal to its highest level since figures were available in 1961." James Purnell, the work and pensions secretary, said "Had the government done nothing other than simply uprate the tax and benefit system, we estimate there would have been 1.7m more children and 1.5m more pensioners in poverty today." I would like to see his understanding of the drivers of poverty and inequality.
- 2006-7: number of pensioners living in poverty rose 300,000 to 2.5m; second successive jump of 100,000 UK children living below the government's poverty threshold - now 2.9m. See BBC News 10th June 2008
- http://news.bbc.co.uk/1/hi/uk/7681361.stm - "...the poor have been getting richer more rapidly than the rich since 2000.
I think we're going to have to access the BHPS data - http://www.data-archive.ac.uk/findingData/bhpsTitles.aspShephard 200?:5 (IFS):
Table 1 (BHC) from DWP 'Low-Income Dynamics 1991-2005 (Great Britain) p22
this is from HM Revenue & Customs
http://www.hmrc.gov.uk/stats/personal_wealth/menu.htm
Unfortunately it doesn'
t seem to say how many people are in each group, I think.The following tables and graphs are from Banks et al 2002 (IFS)
The Gini-coefficient
- the simplest way to understand the Gini coefficient is that 0 = perfect equality of income, and 100 = perfect inequality of income. Gini doesn't help us with wealth, just income.
Articulate clear justification for focusing on wealth not income. Worth considering income too?
CanadaThe Evolution of Wealth Inequality in Canada, 1984-99 - Rene Morisette, Xuelin Zhang and Marie Drolet in International Perspectives on Household Wealth, Edward N. Wolff ed,, 2006
amazing inequality - see graph from p163 in powerpoint. Between 1984 and 1999, the bottom 9 deciles saw a decrease in their share of the net worth, only the top decile saw an increase.
p162 - amazing data - caputre as graph also - median wealth in bottom 3 deciles fell in the period, median wealth in top three deciles rose
by 27% in same period.'our results suggest that permanent income and other family attributes - as measured with cross-sectional data - are not major factors behind the growth of wealth inequality' 152
'we are using cross-sectional data to explain a variable - wealth - which is best understood with longitudinal microdata.' 152
'in a purely accounting sense, registered retirement savings plans (RRSP) have, of all wealth components, contributed the most to the increase in wealth inequality.'
"We conclude that, between low-wealthand high wealth family units, differences in teh number of
years worked full-time, in the growth of inheritances, inter vivos transfers and rates of return on savings are likelly to have played a major role in the growth of wealth inequality. In particular, rates of return on savings may have increased more for wealthy family units than for their poorer counterparts as a result of te booming stock market during the 1990s." 152measurement is problematic - methodological tweaks makes big changes as described on p153
big exclusions from definition... "By financial wealth, we mean net worth minus net equity in housing and net business equity. Put simply, we
definte financial wealth as the stock of wealth left to a family without selling the house and the business."use three inequality measures:
Gini coefficient - sensitive to changes in the middle of the wealth distribution
Coefficient of variation (CV) - sensitive to changes at the top
exponential measure - sensitive to changes at teh
bottom of the distributionCome back. This is a fantastic source.
No comments:
Post a Comment