Income Inequality In OECD Countries

I recently took another look at data, available from the Organization for Economic Co-operation and Development (OECD), on income inequality. The Gini coefficient is available on countries in the database, under measures of Social Protection and Well-being. Under that menu, expand the sub menu for Income distribution and poverty, and select inequality. You can see the Gini coefficient (at disposable income, post taxes and transfers) displayed, by country, for various years. Table 1 shows the most recent numbers, sorted from countries with the most equal distribution to the least equal. For one way of thinking about it, the United States is not number 1, since the US is exceeded by Turkey, Mexico, and Chile.

Table 1: Gini Coefficient

Country	Gini Coefficient (Non Provisional)	Year
Slovenia	0.245	2011
Norway	0.250	2011
Iceland	0.251	2011
Denmark	0.253	2011
Czech Republic	0.256	2011
Finland	0.261	2012
Slovak Republic	0.261	2011
Belgium	0.264	2010
Sweden	0.273	2011
Luxembourg	0.276	2011
Netherlands	0.278	2012
Austria	0.282	2011
Switzerland	0.289	2011
Hungary	0.290	2012
Germany	0.293	2011
Poland	0.304	2011
Korea	0.307	2012
France	0.309	2011
Ireland	0.312	2009
Canada	0.316	2011
Italy	0.321	2011
Estonia	0.323	2011
New Zealand	0.323	2011
Australia	0.324	2012
Greece	0.335	2011
Japan	0.336	2009
United Kingdom	0.341	2010
Portugal	0.341	2011
Spain	0.344	2011
Israel	0.377	2011
United States	0.389	2012
Turkey	0.412	2011
Mexico	0.482	2012
Chile	0.503	2011

The Gini coefficient is a measure of inequality, with a higher Gini coefficient denoting a more unequal distribution of income. It is defined as follows: sort the population in order of increasing income. Plot the percentage of income received by those poorer than each value of income against the percentage of the population with less than that value of income. This is the Lorenz curve, and it will fall below a line with a slope of 45 degrees going through the origin. The Gini coefficient is the ratio of the area between the 45 degree line and the Lorenz curve to the area under the 45 degree line. A Gini coefficient of zero indicates perfect equality, while a Gini coefficient of unity arises when one person receives all income and everybody else gets nothing. Consequently, the Gini coefficient lies between zero and one.