Evolution of global inequality in well-being: A copula-based approach

TL;DR

This paper introduces a copula-based method to analyze how interdependence among income, health, and education affects global well-being inequality from 1980 to 2015, revealing complex multidimensional inequality trends.

Contribution

It develops a flexible copula-based framework to jointly model multiple well-being dimensions and analyze their dependency effects on inequality evolution.

Findings

Inequality decreased in individual dimensions.

Multidimensional inequality trends are influenced by dependency structures.

Interdependence among dimensions affects overall inequality evolution.

Abstract

We employ a flexible parametric model to estimate global income, health, and education distributions from 1980 to 2015. Using these marginal distributions within a copula-based framework, we construct a global joint distribution of well-being. This approach allows us to specifically analyze the impact of dependency structures on global well-being inequality. While inequality decreased in each individual dimension, our findings suggest that multidimensional inequality does not necessarily follow this trend. Its evolution is influenced by the interdependence among dimensions and the chosen inequality aversion parameter.