OECD Forum 2015: Income Inequality in Figures



The gap between rich and poor is growing …

Income inequality has reached record highs in most OECD countries. In the 1980s, the richest 10% of the population had 7 times the income of the poorest 10%; they now have almost 10 times the income of the poorest 10%.


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Over the past several decades, the income gap has grown in both good times and bad. It’s been driven by a surge in incomes for high earners, especially among the top 1%, and much slower income growth – and even declines during economic downturns – for low earners.  


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The wealth gap is also substantial …

Wealth is even more concentrated in OECD countries than income. (To explain, income can be thought of as money that people receive regularly, such as a monthly salary; wealth represents the stock of money people have in their bank accounts as well as other assets.) In 2012, the bottom 40% owned only 3% of total household wealth in OECD countries for which data are available.  By contrast, the top 10% controlled half of all total household wealth and the wealthiest 1% owned 18%.


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Poverty remains a problem …

The crisis led to a marked rise in income poverty in OECD countries, especially when comparing pre- and post-crisis incomes. There has also been a shift in who’s worst affected by poverty, with young people now at greatest risk. Because of the lifelong importance of early investment in education and healthcare, the rise in youth poverty is a major cause for concern.


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Poverty is not just a problem for the unemployed. Many workers in OECD countries earn too little to lift them above the poverty line. This is partly explained by the fact that growing numbers of people are working part-time, on temporary contracts or are self-employed. Between 1995 and 2013, more than half of all jobs created in OECD countries fell into these categories. Low-skilled temporary workers, in particular, have lower and less stable earnings than permanent workers.


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When women work, inequality falls.  

The increase in the number of women working has mostly helped stem the rise in inequality (although there are exceptions). This is despite the fact that women are about 16% less likely to be in paid work than men and still earn about 15% less than men. More needs to be done to reduce the gender pay gap, especially for low-earning women. 


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Compare your country

Find out where your country stands for income inequality based on two broad measures – the relationship between the incomes of the top and bottom 10% and the widely used Gini coefficient. The Gini measure goes from 0 to 1, where 0 represents a theoretical society where everybody has exactly the same income and 1 represents a society where only one person earns all the income.


And compare yourself! 

You can also find out where you stand on the income scale, and test your overall understanding of income inequality, with the OECD’s Compare Your Income web tool.

Find out why more inequality is bad for economic growth in the latest OECD report on inequality, In It Together: Why Less Inequality Benefits All

How to address growing inequality and reduce the gender gap will be discussed at the OECD Forum 2015 - Investing in the Future: People, Planet, Prosperity. Come share your views at the OECD Conference Centre, Paris, France, on 2-3 June !