Global (and Indian) trends in inequality

What is the World Inequality Report and how is its methodology different from other economic reports? How does India fare on it?

The World Inequality Lab, a research centre at the Paris School of Economics, released the 2022 World Inequality Report (WIR) on December 7, 2021. The report authored by a team of top economists led by Lucas Chancel, and co-ordinated by Nobel-winning economist Thomas Piketty, among others, synthesises data and analyses generated by more than 100 researchers over four years. It’s main finding is that the gap between the rich and the poor in terms of share of national income is quite large, and growing rapidly as a result of government policies that favour the affluent elite.

While all governments regularly release economic numbers, such as the Gross Domestic Product (GDP) and growth rate, these do not tell us how growth is distributed across the population – which sections are gaining, and which ones losing. The WIR studies different kinds of financial data to find out how a country’s (and the world’s) income and wealth are distributed. This is vital information because in most democracies, the wealthy can, and do, transform their economic power into political power, and therefore, the higher the inequality, the greater the likelihood that an affluent minority could end up determining the fate of the majority. Availability of accurate data about levels of inequality can help generate public opinion in favour of policy measures that can mitigate them.