Gini coefficient facts for kids
The Gini coefficient is a way to measure how evenly money (or income) is shared among people in a country. It helps us understand if wealth is spread out or if a few people have most of it. An Italian statistician named Corrado Gini created this measure in 1912. It's also called the Gini index or Gini ratio.
Contents
What the Gini Coefficient Means
The Gini coefficient is usually a number between 0 and 1. Sometimes, it's shown as a percentage from 0 to 100.
- A Gini coefficient of 0 means that everyone in a country has the exact same amount of money. Income is perfectly equal.
- A Gini coefficient of 1 (or 100%) means that one person has all the money, and everyone else has none. This is extreme inequality.
In the real world, no country has a Gini coefficient of 0 or 1. Most countries have scores between 0.25 and 0.6 (or 25% and 60%). A lower number means more equal income distribution, while a higher number means more inequality.
How Income Inequality Has Changed
Let's look at how the Gini coefficient has changed over time, both for the whole world and for the United States.
World Income Gini Coefficient
This table shows how income inequality has changed across the entire world over many years.
| Year | World Gini index |
|---|---|
| 1820 | 0.43 |
| 1850 | 0.53 |
| 1870 | 0.56 |
| 1913 | 0.61 |
| 1929 | 0.62 |
| 1950 | 0.64 |
| 1960 | 0.64 |
| 1980 | 0.66 |
| 2002 | 0.71 |
| 2005 | 0.68 |
As you can see, the world Gini index generally increased from 1820 to 2002. This means that income inequality across the globe became higher during that period. By 2005, it had slightly decreased.
United States Income Gini Coefficient
This table shows the Gini coefficient for the United States from 1947 to 2009. These numbers are for income before taxes are taken out.
| Year | pre-tax Gini |
|---|---|
| 1947 | 0.413 |
| 1967 | 0.397 |
| 1968 | 0.386 |
| 1970 | 0.394 |
| 1980 | 0.403 |
| 1990 | 0.428 |
| 2000 | 0.462 |
| 2005 | 0.469 |
| 2006 | 0.470 |
| 2007 | 0.463 |
| 2008 | 0.467 |
| 2009 | 0.468 |
For the United States, the Gini coefficient was lower in the mid-20th century, meaning income was more evenly shared. However, from the 1980s onwards, the number generally increased, showing a rise in income inequality.
Images for kids
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This chart shows that countries with more equal income distribution tend to have longer periods of economic growth. If a country becomes more equal (its Gini index drops from 40 to 37), its economic growth periods can last 50% longer.
See also
In Spanish: Coeficiente de Gini para niños
