The Story of
Increasing Prosperity, Declining Poverty, and
Decreasing World Income Inequality
All visualisations - and many more - can be found on my website 'Our World in Data'
If we go back in time we find a world where all parts of the world were abysmallly poor
Here is the world map for GDP per capita in the year 1.
Prosperity is measured in GDP per Capita per year in dollars that have the same purchasing power as US-Dollars in 1990.
For the distant past we only have reconstructed data, but from the very poor standards of living - that we look at in the other parts of this presentation - we know that every country was extremely poor compared to modern living standards.
For more than the next 1000 years this did not change - all countries remained poor.
Around 1500 AD, living standards improved in Renaissance Italy
Over the next centuries the center of prosperity moved to the north west of Europe
and the fruits of the Enlightenment increased people's incomes there.
This led to the industrialisation and now incomes quickly increased.
this is the world in 1820
If we plot this data over time we see how dramatic this change was.
Compared to the rapid increase in global GDP after 1800, all change before is hardly noticable.
This chart shows Global GDP - to study which countries started to grow when we have to go back to the world maps.
In the early 20th century the world looked like this
All of these visualisations are from my project 'Our World in Data' which is always just one click away.
Then everything happend very quickly and prosperity started to increase in many places around the world
this is the world in 1960
Today the world is vastly richer than ever before - and countries in all parts of the world started to grow.
Living Standards rise with income – and the self-reported happiness of people is closely correlated with the level of prosperity as this chart shows.
This scatter plot is taken from Deaton (2008) – Income, Health, and Well-Being around the World: Evidence from the Gallup World Poll. In Journal of Economic Perspectives.
Before we look at the inequality across the world we look at the worst off and see how poverty has changed
Before modern economic growth the huge majority lived in extreme poverty. This changed when economic growth started to lift more and more people out of poverty
For the last decades we have better data on global poverty (from the World Bank). Global extreme poverty declined from 44% to less than 10% - falling faster than ever.
Let's go back to the question of how the world's prosperity is distributed.
In 1988 the world looked like this – clearly divided in rich and poor.
And now let's see how the world income distribution changed.
This is 1993
In the 1990s global income inequality stops increasing
and starts to decrease
We see the strong income growth in Asia transforming the global income distribution
See how more and more people are moving to the right of the poverty line
out of extreme poverty.
Here is the world income distribution in the latest data.
The world has changed dramatically since 1988 and is becoming more equal.
The world has changed dramatically
but where are we heading?
Let's look again at where we are:
This shows us the levels of prosperity - to see where we are heading we have to look at the growth rates of prosperity
This map shows how GDP per capita grew over the last decade:
If we compare this map with the last map we see that those who need economic growth the most - the world's poorest countries - really have the highest growth rates.
This is shown on the next slide..
Here is this comparison: In the map on top we see the still very big the differences in the level of prosperity - on the bottom we see that the poorest countries have the highest growth rates.
We are becoming a much more equal world!
There is no reason to be complacent, but the world is heading in the right direction when
incomes are growing in all parts of the world,
world poverty is declining rapidly
and that the poorest countries now have the highest growth!
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Go to the next presentation in this series: