Inequality in post-2015 – indicator update

Slightly belatedly: the March draft of the post-2015 Sustainable Development Goals (SDGs), to be finalised in September, has a decent set of income inequality indicators:

Goal 10. Reduce inequality within and among countries

Target 10.1 by 2030 progressively achieve and sustain income growth of the bottom 40% of the population at a rate higher than the national average

Draft indicators

64. [Indicator on inequality at the top end of income distribution: GNI share of richest 10% or Palma Ratio]

65. Percentage of households with incomes below 50% of median income (“relative poverty”)

10.1 Gini coefficient.

The obvious objection is that indicator 10.1 has nothing to do with target 10.1 (and is not great in all sorts of other ways). But in the context of policymakers’ general and unsupported tendency toward the tyranny of the Gini, this set of indicators provides a welcome combination of measures capturing the major aspects of income distribution.

It’s not a million miles from last year’s cracking SDG inequality proposal from the New Economics Foundation:

The Palma ratio – a measure of the proportion of gross national income (GNI) accrued the top 10% versus the bottom 40% – scored highest among the experts we surveyed, providing an easy to understand and statistically robust measure of income inequality. If adopted, this should be supplemented with at least two other indicators. We suggest:

1. A measure of the distributional gains to growth, such as the change in real median income, and

2. A measure of wealth concentration, such as the share of wealth going to the top 1%.

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