Special Report

Countries With the Widest Gaps Between Rich and Poor

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10. Lithuania
> Gini coefficient: 0.38 (pre-tax + transfers: 0.52)
> Unemployment rate: 7.1%
> GDP per capita: $28,032
> Poverty rate: 16.9%
> Population: 2.8 million

Over the past year, Lithuania’s population shrank by more than 1.4% — the largest decline by far of any OECD member states and affiliates. A population decline can lead to reductions in the workforce and limit economic growth — especially in Lithuania, a small country with fewer than 3 million people. On the other hand, a well-educated workforce can help drive growth, and Lithuania has the highest bachelor’s degree attainment rate among OECD member states and affiliates, at 34%.

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9. United States
> Gini coefficient: 0.39 (pre-tax + transfers: 0.51)
> Unemployment rate: 4.4%
> GDP per capita: $53,632
> Poverty rate: 17.8%
> Population: 325.1 million

With a GDP per capita of $53,632 and an unemployment rate of 4.4%, the U.S. economy appears healthy. But the benefits of a strong economy are not evenly enjoyed by all Americans. Of the 325.1 million Americans, an estimated 17.8% live below the poverty line. U.S. taxes and transfers do a relatively poor job of leveling out the economic playing field. While most nations’ Gini coefficients declines by more than 30% after taxes and transfers, the U.S. Gini coefficient declines by only about 23%.

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8. Turkey
> Gini coefficient: 0.40 (pre-tax + transfers: 0.43)
> Unemployment rate: 10.8%
> GDP per capita: $23,756
> Poverty rate: 17.2%
> Population: 80.7 million

Almost by definition, free-market economies will produce winners and losers, and like nearly every other country on this list, Turkey’s is a largely free-market economy. Turkey spans both Europe and Asia, and it has the worst income inequality of any European country and third worst of any Asian country considered.

In recent years, government officials have leveraged their power to target and harm political opponents economically. This has been followed by undermined confidence in Turkey’s financial institutions, several credit rating downgrades, and likely, increased inequality as power and money converge.

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7. Chile
> Gini coefficient: 0.45 (pre-tax + transfers: 0.49)
> Unemployment rate: 7.0%
> GDP per capita: $22,614
> Poverty rate: 16.1%
> Population: 18.1 million

Chile has one of the most developed and fundamentally sound economies in South America. It also has some of the continent’s worst income inequality. Just over 16% of the coastal country’s 18.1 million residents live below the poverty line — and many of them are likely among the 7% of workers who are unemployed.

Chile implemented tax reforms in 2014 to help reduce economic inequality. What effect these reforms will have over the long term remains to be seen.

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6. Mexico
> Gini coefficient: 0.46 (pre-tax + transfers: 0.47)
> Unemployment rate: 3.4%
> GDP per capita: $17,200
> Poverty rate: 16.6%
> Population: 129.2 million

Only five OECD member and affiliate states have worse income inequality than Mexico. In the majority of countries on this list, taxes and transfers reduce income inequality by well over 10%. In Mexico, however, taxes and transfers only close the income gap by 3.2%, the smallest improvement of any country on this list after India. Government corruption likely hampers progress toward greater income equality in Mexico as the country is tied with Russia as the most corrupt on this list.