Special Report

Countries With the Widest Gaps Between Rich and Poor

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15. Latvia
> Gini coefficient: 0.35 (pre-tax + transfers: 0.48)
> Unemployment rate: 8.7%
> GDP per capita: $23,710
> Poverty rate: 16.8%
> Population: 1.9 million

Latvia’s Gini coefficient of 0.35 is the 15th highest among the 42 OECD member states and affiliates for which data exists. The Baltic nation narrowly edged out Israel for a spot on this list. Latvia may struggle in the future to sustain economic growth as it faces a declining population. The nation’s population contracted by nearly 0.9% over the last year. The decline in population will likely translate into a decline in the workforce and less economic activity, which could hamper economic growth in Latvia.

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14. New Zealand
> Gini coefficient: 0.35 (pre-tax + transfers: 0.46)
> Unemployment rate: 4.7%
> GDP per capita: $35,777
> Poverty rate: 10.9%
> Population: 4.8 million

Higher labor force participation can help drive down income inequality as a higher share of working people can reduce the poverty rate and shrink the gap between rich and poor. Yet this is not the case in New Zealand, which still has among the highest income inequalities despite having one of the highest labor force participation rates. More than 70% of New Zealanders aged 15 and older are in the labor force — the second highest rate among OECD member states and affiliates

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13. United Kingdom
> Gini coefficient: 0.35 (pre-tax + transfers: 0.51)
> Unemployment rate: 4.3%
> GDP per capita: $39,425
> Poverty rate: 11.1%
> Population: 66.0 million

Though the United Kingdom has one of the widest gaps between rich and poor residents, the country is doing more than any other on this list to reduce this inequality. Countries can redistribute wealth using personal income taxes, workers’ social security contributions, and cash transfers. The U.K.’s Gini coefficient, after factoring in these redistributions, drops by more than 30%, the greatest reduction among nations on this list.

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12. South Korea
> Gini coefficient: 0.36 (pre-tax + transfers: 0.41)
> Unemployment rate: 3.7%
> GDP per capita: $35,020
> Poverty rate: 17.4%
> Population: 51.5 million

With just 3.7% of its labor force out of work, South Korea has one of the lowest unemployment rates among wealthy nations. Still, the high income inequality in the country is highlighted by the fact that, despite the low jobless rate, 17.4% of South Koreans live below the poverty line.

President Moon Jae-in took power in 2017, promising economic reforms, including an 11% minimum wage increase. The measure has been widely criticized, however. While businesses argue the increase is stifling growth, workers argue it was not large enough.

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11. Russia
> Gini coefficient: 0.38 (pre-tax + transfers: 0.49)
> Unemployment rate: 5.2%
> GDP per capita: $24,417
> Poverty rate: N/A
> Population: 144.5 million

Russia is one of the wealthiest countries in the world, but a disproportionate share of that wealth is concentrated at the top. The country’s income inequality is largely the product its system of government. Russia has a Corruption Perceptions Index score of 28 — tied for the worst among OECD member states and affiliates and one of the lowest in the world. Oligarchs with close ties to the Russian government can use those relationships to earn lucrative business deals, essentially mounting hurdles to upward economic mobility in the country.