Graph depicting Income Inequality and Safety Net Spending
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Sources: OECD

Data: Excel

Last updated: March 16, 2016


Gini Coefficient and Social Spending as a Percentage of GDP in the OECD

Description: This graph compares the primary measure of income inequality (the Gini coefficient) against the percentage of the GDP each country dedicates to public sector social spending. The countries included are all of the members of the OECD. A Gini coefficient of 0 would indicate that every person in the country had precisely the same income and a Gini coefficient of 1 would indicate that a single person had all of the income of the entire country while nobody else had any income.

Related blog post: Inequality in America

Discussion: The relationship is obvious- the more of a country's GDP that is dedicated to public sector safety net spending, the smaller the gap between the rich and everybody else.

France (which spends the largest percentage of its GDP on its safety net), Mexico (which spends the smallest percentage) and the United States are specifically marked. The U.S. spends a low percentage of its GDP on its safety net and has very high income inequality. Only three countries in the OECD have more unequal income- Chile, Mexico and Turkey. Notably, the U.S.'s income inequality is high even for a country that spends a relatively small portion of its GDP on maintaining its safety net, which suggests that the limited safety net spending is only one part of the explanation for the level of income inequality.

See more graphs about: Income   Spending   Inequality  

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