Sweden and the United States both have large, productive, high-income economies. Sweden's Gini coefficient for disposable income is approximately 0.27; the United States is approximately 0.39. These two numbers capture in a single ratio something that would otherwise require a full distributional analysis to express: Swedish income is more equally distributed than American income, and the gap between the two countries is substantial and persistent. For international comparisons, policy evaluation, and trend monitoring, the Gini coefficient translates the complexity of an entire income distribution into one number that can be tracked over time and compared across countries.
In plain terms
The Gini coefficient (named after Italian statistician Corrado Gini, who published the measure in 1912) is a statistical summary of income distribution inequality. It is derived from the Lorenz curve:
Gini = Area A / (Area A + Area B)
Where Area A is the area between the Lorenz curve and the 45-degree line of perfect equality, and Area A + Area B is the total area below the line of equality (a triangle representing the case where one person holds all income).
Equivalently: Gini = 2 × Area A (since Area A + Area B = 0.5)
Gini = 0: perfect equality — every person has the same income; the Lorenz curve lies on the diagonal; Area A = 0
Gini = 1: perfect inequality — one person holds all income; the Lorenz curve lies along the bottom and right axes; Area A = 0.5
Reading the result
| Gini range | Typical characterization | Example countries |
|---|---|---|
| 0.20–0.30 | Low inequality | Sweden (0.27), Denmark (0.28), Germany (0.30) |
| 0.30–0.40 | Moderate inequality | France (0.32), Canada (0.33), United States (0.39) |
| 0.40–0.50 | High inequality | Mexico (0.46), Brazil (0.49) |
| > 0.50 | Very high inequality | South Africa (0.63), some developing economies |
The Census Bureau's annual Gini calculations show the U.S. market-income Gini rising from approximately 0.48 in 1979 to over 0.55 by the late 2010s — one of the steeper increases among peer economies. After-tax, after-transfer income Ginis are lower (approximately 0.39) but still among the highest in the OECD. The World Inequality Database provides comparable data across countries and historical time periods.
Worked example
For the five-quintile economy in the Lorenz curve article:
- Income shares: 5%, 10%, 15%, 25%, 45%
- Lorenz curve points: (20, 5), (40, 15), (60, 30), (80, 55), (100, 100)
- Area A (between curve and equality line): calculated by summing the trapezoidal segments between the curve and the diagonal
- Resulting Gini ≈ 0.36 — moderate inequality
Where it's used
The Gini is used by governments, international organizations (the World Bank, OECD, UN), and researchers to track inequality trends, compare countries, and evaluate whether policies reduce or increase inequality. The OECD's income distribution database standardizes Gini calculations across its members for comparability. A Gini rising over time within a country signals that gains from economic growth are increasingly concentrated rather than broadly shared.
