Inequality, income shares and poverty: The practical meaning of Gini coefficients: Policy Brief No.3


The global financial crisis has revived the debate on wage and income inequality, and led many to question the inequities that emerged in the preceding boom years. The Gini coefficient is a frequently cited statistic in these debates, as it is a convenient tool for summarizing the distribution of wages or, more generally, incomes in a single number.

However, compared to statistics like the unemployment rate or the poverty headcount ratio, it is less easily understood. This policy brief offers a short guide to the Gini coefficient and shows which countries have low and which have high Gini coefficients, as well as what the different Gini coefficients typically imply for the incomes of the poor and the rich.