Within, Between, and Beyond: A New Approach to Examining World Income Inequality.

This article examines the growing impact of national income inequality on global income disparities by distinguishing between the "within-country" (direct) and "between-country" (indirect) components of world income inequality. Using data from 123 countries covering over 90% of the world’s population between 1990 and 2017, the study employs Theil’s T index and introduces median incomes—rather than mean incomes—to better represent the average person’s income within countries. Findings reveal that inequality measured by median incomes is nearly 15% higher than that measured by mean incomes, and convergence between countries is about 7.5% slower when using median incomes, indicating that national inequality both elevates global income inequality and slows its reduction. Overall, the combined direct and indirect effects of national inequality now account for approximately half of global income inequality, highlighting the importance of addressing income distribution within countries alongside economic growth in efforts to reduce worldwide disparities.