International Comparisons: Social Inequality (Gini Coefficient)

Social scientists generally believe that one of the roots of instability in any society is the level of social inequality that exists. The greater the gap between the rich and the poor, the greater the likelihood of such problems as crime, terrorism and political instability. When selecting a country for a retirement abroad, it is useful to evaluate the level of social inequality that exists in a potential retirement destination.

One of the commonly used measures of social inequality is the Gini Coefficient. The Gini Coefficient ranges in value from zero to one. When it has a value of zero, a situation of perfect equality exists. When it has a value of one, it reflects a situation of perfect inequality. In other words, in a society with perfect equality (Gini Coefficient = zero) then all the wealth is divided equally among everyone. On the other hand, in a society with perfect inequality (Gini Coefficient = one) then only one person has all the wealth and everyone else has nothing.

Although many social scientists believe that social inequality is generally undesirable, one should use some care in using the measure. Some scientists believe that social equality may also be undesirable. Nevertheless, the Gini Coefficient is a useful tool to use to gauge the potential for problems that may arise from social inequality.

To make the numbers easier to interpret, the Gini Coefficient has been multiplied by 100. Thus, zero represents a society with perfect equality and 100 represents a society with perfect inequality. The source of the data presented here is the United Nations 2009 Human Development Report.

International Comparisons: Extremely High Levels of Social Inequality (Gini Coefficient greater than 60)

These three countries fit the description of what one would consider a typical developing country where the middle class is not developed and there is a large gap between the rich and the poor. The Gini Coefficent values of 60-75 represent the upper end of the scale of social inequality that the Gini Coefficient will reach and indicates a large imbalance in wealth between the rich and the poor in the following countries.

• Namibia:74.3
• Comoros:64.3
• Botswana:61.0

International Comparisons: Very High Levels of Social Inequality (Gini Coefficient 50-60)

Countries with a relatively high Gini Coefficient that fall in this category are all developing countries with a sharp gap between the rich and the poor. Social inequality is at a very high level. For the most part, these countries are either in Latin America or Africa with only one country from Asia. Many social scientists believe that this is in part due to the colonial political systems that once dominated these countries which created such rigid social classes. Even today, these countries often have land ownership systems that evolved under the Spanish colonial influence that created a small wealthy landed class.

And as might be expected, the high Gini Coefficient represents a level of social inequality that has historically contributed to high levels of crime or political instability in several of these countries.

• Haiti:59.5
• Angola:58.6
• Colombia:58.5
• Bolivia:58.2
• South Africa:57.8
• Honduras:55.3
• Brazil:55.0
• Panama:54.9
• Ecuador:54.4
• Guatemala:53.7
• Paraguay:53.2
• Suriname:52.9
• Liberia:52.6
• Lesotho:52.5
• Nicaragua:52.3
• Chile:52.0
• Papua New Guinea:50.9
• Swaziland:50.7
• Zambia:50.7
• Cape Verde:50.5
• Zimbabwe:50.1
• Argentina:50.0
• Dominican Republic:50.0

International Comparisons: High Levels of Social Inequality (Gini Coefficient 40-50)

Countries with Gini Coefficients that fall into this category consist of developing countries and two developed countries with moderate to high levels of social inequality. The developing countries include countries from Latin America, Africa, and Asia. Interestingly enough, the two developed countries that fall into this category are the United States and Singapore.

Although the United States has a moderately high Gini Coefficient, some social scientists would argue that the Gini Coefficient only measures cash income while some countries like the United States provides a considerable amount of social welfare that is non-monetary in nature. As a result, the Gini Coefficient for the United States and Singapore is probably lower than what is shown. Nevertheless, there still is probably more social inequality in these two countries than what the average person might assume.

• El Salvador:49.7
• Peru:49.6
• Côte d’Ivoire:48.4
• Mexico:48.1
• Kenya:47.7
• Congo:47.3
• Nepal:47.3
• Gambia:47.3
• Costa Rica:47.2
• Madagascar:47.2
• Mozambique:47.1
• Bhutan:46.8
• Rwanda:46.7
• Uruguay:46.2
• Jamaica:45.5
• Guyana:44.6
• Cameroon:44.6
• Congo (Democratic Republic of the):44.4
• Philippines:44.0
• Niger:43.9
• Central African Republic:43.6
• Hong Kong, China (SAR):43.4
• Venezuela (Bolivarian Republic of):43.4
• Guinea:43.3
• Turkey:43.2
• Nigeria:42.9
• Ghana:42.8
• Saint Lucia:42.6
• Uganda:42.6
• Singapore:42.5
• Thailand:42.5
• Sierra Leone:42.5
• China:41.5
• Gabon:41.5
• Sri Lanka:41.1
• Morocco:40.9
• United States:40.8
• Georgia:40.8
• Tunisia:40.8
• Turkmenistan:40.8
• Cambodia:40.7
• Trinidad and Tobago:40.3
• Djibouti:40.0

International Comparisons: Moderate Levels of Social Inequality (Gini Coefficient 30-40)

Countries with a Gini Coefficient that fall into this category of moderate social inequality include a mix of developed and developing countries. Theoretically, these countries with a moderate Gini Coefficient should be less likely to experience internal problems caused by social inequality than those listed above. While this may be generally true for the developed countries, developing countries may face internal problems caused by other factors – such as ethnic separatism.

• Chad:39.8
• Burkina Faso:39.6
• Timor-Leste:39.5
• Indonesia:39.4
• Israel:39.2
• Senegal:39.2
• Macedonia (the Former Yugoslav Rep. of):39.0
• Mauritania:39.0
• Malawi:39.0
• Mali:39.0
• Benin:38.6
• Portugal:38.5
• Iran (Islamic Republic of):38.3
• Malaysia:37.9
• Viet Nam:37.8
• Jordan:37.7
• Yemen:37.7
• Russian Federation:37.5
• India:36.8
• Uzbekistan:36.7
• Azerbaijan:36.5
• New Zealand:36.2
• Italy:36.0
• United Kingdom:36.0
• Estonia:36.0
• Lithuania:35.8
• Bosnia and Herzegovina:35.8
• Latvia:35.7
• Moldova:35.6
• Guinea-Bissau:35.5
• Algeria:35.3
• Australia:35.2
• Poland:34.9
• Spain:34.7
• Tanzania (United Republic of):34.6
• Togo:34.4
• Ireland:34.3
• Greece:34.3
• Kazakhstan:33.9
• Armenia:33.8
• Switzerland:33.7
• Tajikistan:33.6
• Burundi:33.3
• Belgium:33.0
• Albania:33.0
• Mongolia:33.0
• Kyrgyzstan:32.9
• France:32.7
• Canada:32.6
• Lao People’s Democratic Republic:32.6
• Egypt:32.1
• Korea (Republic of):31.6
• Romania:31.5
• Slovenia:31.2
• Pakistan:31.2
• Bangladesh:31.0
• Netherlands:30.9
• Luxembourg:30.8
• Hungary:30.0

International Comparisons: Low Levels of Social Inequality (Gini Coefficient 20-30)

Countries with a Gini Coefficient that fall into this category of low social inequality are developed European countries for the most part and includes Japan. This low Gini Coefficient value suggests a lower likelihood of domestic tension from social inequality.

• Ethiopia:29.8
• Bulgaria:29.2
• Austria:29.1
• Croatia:29.0
• Germany:28.3
• Ukraine:28.2
• Belarus:27.9
• Finland:26.9
• Norway:25.8
• Czech Republic:25.8
• Slovakia:25.8
• Sweden:25.0
• Japan:24.9
• Denmark:24.7

International Comparisons of Social Inequality: Summary

The Gini Coefficient is a useful measure of social inequality. It is not perfect and overstates the level of inequality for countries that provide non-monetary forms of social welfare to its citizens. As an indicator of social inequality, it does suggest the potential for social and political tensions that arise from differences in wealth between the rich and poor for any given country.

The United States has a moderately high Gini Coefficient, which might be an indicator of the types of social problems that the United States has experienced as a result of social inequality. There are developing countries that are viable destinations if you should choose to retire abroad that have levels of social inequality that are comparable to the USA or lower. For example, the Philippines (my retirement destination) has a Gini Coefficient of 44.0 compared to 40.8 for the USA. And, I have not noticed any social instability that makes it significantly better or worse than the USA.

(Photo by: Vivekchugh)

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