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Falling Poverty and Income Inequality: A Global Phenomenon

Type: Research Studies
Date Published: October 16, 2006
Research Topics:
Poverty & Welfare
In 2000, the United Nations brought attention to the matter of global poverty by establishing the Millennium Development Goals. First among these goals was a commitment to "reduce by half the proportion of people that, in 1990, lived on less than one dollar per day" by the year 2015. While an important challenge, great care must be taken in defining poverty and its causes, so that appropriate solutions and accurate measurement of progress towards such goals can be achieved. Unfortunately, most past research on poverty and inequality, including the UN Development Program's Human Development Reports, does not provide a clear picture of human welfare.

Sala-i-Martin's summary assesses world poverty and income inequality using a new measurement tool that estimates the distribution of income among individuals in 138 countries between 1970 and 2000. After reviewing past research on poverty and inequality, the study presents the World Distribution of Income (WDI) in order to analyze global trends in poverty and inequality. The results show that despite the growing income gap between rich and poor countries, world poverty and income inequality fell markedly between 1970 and 2000.
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