Global Patterns of Inequality and Poverty Dynamics: Evidence from Cross-Country Data

Abstract

Inequality and poverty remain critical challenges in global economic development, with persistent disparities across countries despite overall progress in poverty reduction. Understanding their interaction is essential for designing effective policy interventions. This study aims to examine global patterns of inequality and poverty, analyze the relationship between inequality and poverty, and assess their temporal dynamics using cross-country data. The study adopts a quantitative approach based on secondary data covering countries over multiple years. Inequality is measured using the Gini coefficient, Palma ratio, and p90/p10 ratio, while poverty is measured using the poverty headcount ratio. The analysis employs descriptive statistics, trend analysis, Pearson correlation, and an independent sample t-test. The findings reveal significant variation in inequality and poverty across countries. While poverty has declined substantially over time, inequality has remained relatively stable. A moderate positive and statistically significant relationship between inequality and poverty is observed (r = 0.27, p < 0.001). The t-test results further indicate that countries with higher inequality experience significantly higher poverty levels. The study concludes that economic growth has contributed to poverty reduction but has not ensured equitable income distribution. Addressing inequality through inclusive policies is essential for achieving sustainable poverty reduction and balanced economic development.