Changing income inequalities within and between nations: New evidence

Fresh data sources on cross-national income are examined to document recent changes in the composition of world income inequality within and between n ations. New evidence shows that during the 1980s and 1990s the composition of world income inequality experienced a fundamental change, characterized by the diminishing significance of between-nation income differences and th e growing prominence Of within-nation inequalities. Two competing trends ac count for this change: (1) steady, growth in the average level of income in equality within nations, and (2) a decline in income inequality between nat ions. These recent trends signify a reversal in one of the major legacies o f the Industrial Revolution-the internationalization of world income inequa lity across national borders. The findings raise important questions for fu ture studies of cross-national inequality and development.