Week 9 · Chapter

Chapter 9 — Global Inequality

Introduction to Sociology Free sample edition

The module's primary reading · ~35–45 minutes · Objective 5 (analyze social stratification, class, and global inequality — caste and class systems, income versus wealth, poverty measures, social mobility, the Davis-Moore thesis against the conflict view, and modernization against dependency and world-systems perspectives — reading income, poverty, and cross-national inequality data with their sources and years), building on Objective 2 (describe and evaluate the major sociological research methods (surveys, experiments, field research and ethnography, secondary-data analysis), distinguish reliability from validity and a population from a sample, and read a social statistic critically — what it measures, over what population and period, what it shows and does not, and whether it is a correlation or a cause) · Read it first this week; the lecture, the slide deck, the tutorial, the quiz, and the Sociology in Action Workshop all build on it.

In plain language

Some countries are far richer than others, and where a person is born shapes how long they live, how long they go to school, and what a day's work pays. This week names that worldwide ranking global stratification (the sorting of the world's countries into layers by wealth, power, and well-being). You will learn how countries are grouped by income per person (a country's total income divided by its population). You will see where the world's poverty line (the dollar-a-day amount below which a person counts as extremely poor) is drawn, and why moving that line changes the count. You will weigh three competing stories about why the gaps exist, then read real figures on inequality inside seven countries, step by step.

Why you already care about this

In June 2025 the World Bank raised its International Poverty Line to 3.00 dollars a day. Under the new line, about 817 million people, roughly one person in ten, lived in extreme poverty in 2024. That count was about 125 million higher than under the old line, and not because anyone got poorer.

Those numbers can feel far away, but the layers they describe are in your closet. Turn a shirt inside out and read the label. It names a country, and often not the country where you bought it. The phone in your pocket was likely assembled in one country from parts made in several others. A classmate sends part of each paycheck to family in another country, and a cousin works for a company whose head office is an ocean away.

None of these moments feels like sociology. Each one is a moment when the world's layers touch your life. This chapter gives you the words for those layers and the habits to read the numbers behind them without being fooled.

By the end of this chapter you will be able to:

define global stratification and place an illustrative country in one of the World Bank's four income groups from its GNI per capita;
explain why GNI per capita and GDP per capita are averages that hide how income is shared, and name what life expectancy, years of schooling, and the Human Development Index add;
explain what the International Poverty Line is, and why raising it raised the count of people in extreme poverty;
lay out modernization theory, dependency theory, and world-systems theory, with the main critique of each, without declaring a winner;
run one garment factory through the three theories;
read the 2022 Gini figures four ways, with the arithmetic shown, and say whether a cross-country pattern is a correlation or a cause.

Carry this line with you: a poverty line is a definition, not a fact of nature.

Where we are

Already covered: Week 1 gave you the three perspectives and the macro and micro levels. Week 2 taught the four data questions, the percentage point, and correlation versus causation. Weeks 3 to 6 showed how culture, the self, groups, and deviance work inside a society. Week 7 named stratification, the median, and absolute and relative poverty, and Week 8 pulled it all together and added the level-of-analysis habit.
This week: stratification drawn across the whole world: how countries are grouped and measured, how extreme poverty is counted, three explanations for the gaps, and how to read cross-national figures.
How they connect: Week 7 ranked households inside one country; this week ranks countries, and reads the figures with Week 2's four questions and Week 8's level-of-analysis habit.
Where we're going next: Week 10, Race & Ethnicity, begins the axes of inequality inside a society, and asks how a social category is built and read in the data.

Week 7 is the chapter this one leans on most. There you met social stratification, a society's ranking of its members into layers, and the median, the middle value when every case is lined up from lowest to highest. You also met absolute poverty, lacking the basics needed to live. This week stretches each idea across borders. Week 2's four questions matter all week: what is measured, over whom and when, what it shows and does not, and whether it is a correlation or a cause.

1. See the world's layers: global stratification and income groups

You can picture two newborns arriving on the same morning in two different countries. One goes home to a house with running water and a clinic down the street. The other goes home to a village where the nearest clinic is a day's walk away. Neither baby did anything to earn its starting place. The layers were there before either arrived.

That is the first idea of the week. The layering you met inside one country in Week 7 also runs between countries.

Global stratification is the ranking of the world's countries into layers by wealth, power, and well-being, the same kind of layering found inside one society drawn across the whole world.

To rank countries, you need one yardstick that every country reports. The World Bank uses income per person.

GNI per capita is a country's gross national income divided by the number of people who live there, an average in dollars per person per year that says nothing about how the income is shared.

The World Bank then sorts countries into groups by that yardstick.

An income group is one of the World Bank's four classes of countries, low, lower-middle, upper-middle, and high income, assigned by GNI per capita against dollar thresholds that are reset every July.

For fiscal year 2027, on 2025 data, the thresholds are these.

World Bank income-group thresholds for fiscal year 2027, in dollars of GNI per capita, Atlas method, 2025 data
Income group	GNI per capita
Low income	1,175 dollars or less
Lower-middle income	1,176 to 4,635 dollars
Upper-middle income	4,636 to 14,375 dollars
High income	above 14,375 dollars

Set the top threshold, 14,375 dollars, versus the low-income ceiling of 1,175 dollars: the top threshold is more than 12 times as high. That is how far apart the world's layers sit before you even look inside a country.

Worked example — placing an illustrative country. An illustrative country has a gross national income of 50 billion dollars, written out as 50,000,000,000, and a population of 10 million, written out as 10,000,000.

Divide the total by the population: 50,000,000,000 ÷ 10,000,000 = 5,000 dollars per person.
Compare with the thresholds: 5,000 is above 4,635 and not above 14,375.
Name the group: an illustrative country with GNI per capita of 5,000 dollars falls in the upper-middle group, 4,636 to 14,375 dollars, for fiscal year 2027.

In words: this country's income per person puts it in the upper-middle group, and that label says nothing yet about how its income is shared.

In practice (your tools). In any free spreadsheet, type 50000000000 in A1 and 10000000 in A2. In A3, type =A1/A2 to get 5000. Then compare A3 with the thresholds in the table above.

Misconception check — "the income group tells me how the typical person lives." You may be tempted to read "upper-middle income" as a description of an ordinary resident. It is tempting, because the label sounds like a person's salary bracket. But an income group is a classification of a country, not a description of its typical resident. A country can sit in the high-income group while many of its people live on far less. The cure: say "this country is classified as," never "people there earn."

Misconception check — "developing" as one road. Students also talk about "developing countries" as if every low-income country were on the same road, one step behind a rich one. The four groups are bands on one yardstick, not stops on one route. Countries reach a band by very different histories, as Sections 4 and 5 show.

Memory hook: the group labels the country, not the person.

2. Measure development: averages, lives, and schooling

Picture, as you read, two illustrative villages of five households each. In the first, every household earns 6,000 dollars a year. In the second, four households earn 2,000 dollars each and one earns 22,000 dollars. Walk down each street and the two places feel nothing alike. Yet on one common yardstick they look the same.

Worked example — two illustrative villages with one average. Find each village's average income per household, then its median.

First village: 5 × 6,000 = 30,000 dollars in total, and 30,000 ÷ 5 = 6,000 dollars per household. Lined up, the middle household earns 6,000 dollars.
Second village: 4 × 2,000 + 22,000 = 8,000 + 22,000 = 30,000 dollars in total, and 30,000 ÷ 5 = 6,000 dollars per household. Lined up, the middle household earns 2,000 dollars.
Compare: the two averages are equal at 6,000 dollars, but the middle household in the second village earns 2,000 dollars, a third as much.

In words: an average per person or per household can hide deep poverty beside one large income. That is exactly the weakness of the national yardsticks.

GNI per capita works the same way, and so does its close cousin.

GDP per capita is a country's gross domestic product, the value of everything produced inside its borders in a year, divided by its population; an average that hides how the output is shared.

GNI counts the income a country's residents earn, including income from abroad; GDP counts what is produced inside the borders. For your first course, the point they share matters more than the difference: each is a total divided by a head count.

Because money alone misses a lot, development is also measured directly.

Life expectancy is the number of years a newborn would live on average if the death rates of the present day held for its whole life, a common measure of a population's health.
Years of schooling is the amount of formal education people in a country receive, counted in years, used as a direct measure of a population's education.

The best-known way to fold these together is one composite score.

The Human Development Index is a composite score that combines life expectancy, years of schooling, and income per person into one number, so countries can be ranked on more than income alone. Its short name is the HDI.

A caveat worth saying aloud: a composite is only as good as its choice of parts. Change what you count, or how much each part weighs, and a ranking can change.

Misconception check — "GDP per capita is the typical person's income." You may read GDP per capita as what an ordinary person earns; many students do. It is tempting, because "per capita" sounds like "per person's paycheck." But it is an average, a total divided by a head count, and the two villages show how an average hides the spread. The cure: say "average output per person," and ask what the median person has.

Pause and choose one of these two prompts.

(a) Name one thing about well-being in your own community that an income figure would miss, and say how you might measure it.
(b) If you were building a composite score like the HDI, name one part you would add or drop, and explain how that choice could change a ranking.

Memory hook: a head-count average is not your neighbor's paycheck.

3. Draw the line: extreme poverty and the International Poverty Line

In Week 7 you met absolute poverty, lacking the basics needed to live. To count absolute poverty across the whole world, someone has to pick one amount of money that marks "too little to live on." That amount is a line, and a line is a choice.

Extreme poverty is living on less than the International Poverty Line, the World Bank's threshold for the lowest level of income or consumption used to count the world's poorest people.
The International Poverty Line is the World Bank's dollar-a-day threshold for extreme poverty, set at 3.00 dollars a day in 2021 international prices since June 2025, after 2.15 dollars a day in 2017 prices.

Worked example — what moving the line did. Take the steps in order.

The definition: since June 2025 the International Poverty Line is 3.00 dollars a day in 2021 international prices, raised from 2.15 dollars a day in 2017 prices.
A dollar-year check: the two lines are stated in different price years, so 3.00 − 2.15 is not a fair measure of the change. Week 7's dollar year applies here too.
The count: about 817 million people, roughly one in ten, lived below the 3.00-dollar line in 2024. Written out, that is about 817,000,000 people.
The definition effect: the new estimate is about 125 million higher than under the old line, written out as 125,000,000. So the old line would have counted about 817 − 125 = 692 million, or about 692,000,000 people.
The read: the rise came from moving the line, not from falling incomes.

In words: the same people with the same incomes were counted differently because the definition changed.

The long-run finding is a different thing from that one-year jump. Over the long run, the share of the world's people in extreme poverty has fallen from about one in every two or three to about one in ten. Both statements are true at once, and each answers a different question.

Misconception check — "a poverty line is a natural fact." You may treat the line as if it were measured, like a temperature. It is tempting, because it is a precise dollar amount. But a poverty line is a definition chosen by people. Raising the line raised the count by definition. The cure: whenever a poverty count changes, ask first whether the line moved.

Honesty note. A count of "about 817 million" is an estimate built from household surveys in many countries. It is rounded on purpose, and it should be read as "about," never as an exact head count.

Memory hook: ask whether the people changed or the line moved.

4. The first explanation: modernization theory

Picture a small town that grew up around farming, then got a rail line, a mill, and a school. Over two generations, farm work gave way to factory work, and families moved closer to the mill. One story about the world's layers says every poor country can take a road like that one.

Modernization theory is the view, associated with Rostow's 1960 book The Stages of Economic Growth, that low-income countries can develop through stages of industrialization and cultural change; critics call it ethnocentric for assuming one path modeled on the West.

Rostow (1960), The Stages of Economic Growth, laid out development as a sequence of stages. In this view, poverty is mainly a matter of a late start. Investment, new technology, and new habits at home move a country up the stages.

The critique is as important as the theory. Critics call modernization theory ethnocentric. Week 3 gave you that word: judging another culture by the standards of your own. Here it means assuming the West's road is the only road, and treating every low-income country as an earlier version of a rich one.

Worked example — reading one claim through the theory. An illustrative report says: "This country is poor because it has not yet built enough factories or schools."

Where does it locate the cause? Inside the country, in what it has not yet done.
What does it assume? That more factories and schools will move the country up a series of stages.
What would a critic ask? Whether every country can follow one road, and whether conditions outside the country matter too.

In words: the claim is a modernization-theory claim, and the critic's question is what it leaves out.

Misconception check — "modernization theory is the right one" or "it is the outdated one." Students often crown modernization theory as correct, because some countries did industrialize and grow. Others dismiss it as discredited. Both moves skip the weighing. It is a perspective with evidence and critics, like the two that follow. The cure: state the theory at full strength, then state the critique at full strength.

Memory hook: one road, or many roads?

5. The second and third explanations: dependency and world systems

Now picture the same illustrative mill town from the other end of the rail line. The town ships raw cotton to a distant city that spins it, sews it, brands it, and sells it back at a far higher price. Most of the money stays where the brand lives. A second story about the world's layers starts there.

Dependency theory is the view that wealthy core nations prosper by drawing resources from poorer nations, so the poverty of the poorer nations is produced by the relationship between them rather than by a late start.

Where modernization theory looks inside a poor country, dependency theory looks at the ties between countries. Poverty, in this view, is not a stage before wealth. It is the other side of someone else's wealth.

The third story widens the lens to one world economy.

World-systems theory is Wallerstein's account, from his 1974 book The Modern World-System, of one world economy whose countries hold core, semi-periphery, or periphery positions in a global division of labor.

Wallerstein (1974), The Modern World-System, supplies three position words.

Core nations are, in world-systems theory, the wealthy, industrialized countries at the center of the world economy that gain the most from its exchanges.
The semi-periphery is, in world-systems theory, the countries between the core and the periphery, which are drawn on by the core and in turn draw on the periphery.
The periphery is, in world-systems theory, the poorest countries of the world economy, which mostly supply raw materials and low-paid labor to wealthier nations.

Worked example — sorting four illustrative statements. Name the theory each one speaks for.

"This country will grow once it builds modern industry and modern habits." Modernization theory: the cause and the cure sit inside the country.
"This country stays poor because richer nations buy its raw materials cheap." Dependency theory: the cause sits in the relationship between richer and poorer nations.
"This country assembles goods from imported parts for richer markets, while buying raw materials from poorer ones." World-systems theory: a semi-periphery position, between core and periphery.
"This country exports crops and cheap labor and imports finished goods." World-systems theory names this a periphery position; dependency theory would read it as a drawn-on, poorer nation.

In words: modernization theory looks inside one country, dependency theory looks at a two-sided tie, and world-systems theory looks at three positions in one world economy.

Misconception check — dependency and world-systems theory as the same thing. You may merge the two because both look at ties between countries. They do overlap. But dependency theory pictures a relationship between richer and poorer nations, while world-systems theory adds a middle position, the semi-periphery, and treats the whole world as one economy. The cure: count the positions: two sides in dependency theory, three positions in world-systems theory.

Misconception check — "periphery means far away on the map." Students sometimes read "periphery" as a place on the edge of a map. In world-systems theory it is a position in the world economy, not a spot on a globe. The cure: ask what a country sells and buys, not where it sits.

Pause and choose one of these two prompts.

(a) Pick one of the three theories and write the strongest case for it in two sentences, then the strongest critique of it in two sentences.
(b) Name one kind of evidence that would help you weigh modernization theory against dependency theory in a specific country, and say what each theory would predict that evidence shows.

Memory hook: inside the country, between two countries, or across one world economy?

6. Follow the shirt: globalization and the garment factory

Go back to the label in your shirt. The cotton may have been grown in one country, spun in a second, sewn in a third, and shipped to a store in a fourth. A company you have heard of designed it, and a factory you have never heard of made it.

Globalization is the growing flow of goods, money, people, and ideas across national borders, which ties distant economies and societies more closely together.
A multinational corporation is a company that owns or controls production, offices, or sales in more than one country while keeping its headquarters in one home country.

Worked example — one illustrative garment factory, three theories. An illustrative factory sews shirts for a brand based in another country. The factory employs workers from nearby towns, and the brand sells the shirts in wealthier markets.

Modernization theory: the factory is an early stage of industrialization. It brings wages, skills, and new work habits, the first step on a road that could lead to higher-paid industry.
Dependency theory: the factory is value drawn from a poorer nation to a richer one. The brand keeps most of the shirt's price, and the low wages are the reason the factory is there at all.
World-systems theory: the factory is one link in a chain that runs from the periphery to the core. Raw cotton, low-paid sewing, and the brand's design and sales each sit in a different position in one world economy.

In words: one factory supports three readings, and the readings disagree about whether the factory is a ladder or a drain. The course gives no verdict; the evidence on any one factory is where you weigh them.

The course's three perspectives can read the same factory too.

Structural functionalism (macro): the factory's jobs and exports do a job for the economy, linking a town to the world market.
Conflict theory (macro): the question is who gains the most from the shirt's price, the brand, the factory owner, or the worker.
Symbolic interactionism (micro): the question is what the work means to the people who do it, and what the country name on the label means to a shopper who reads it.

Misconception check — "a multinational corporation is any big company." You may use the term for any large firm. It is tempting, because many multinationals are huge. But size is not the test. A small firm with a workshop in a second country is multinational; a giant firm that operates in only one country is not. The cure: ask "does it produce or sell in more than one country?"

Pause and choose one of these two prompts.

(a) Pick one item you own, read its label, and describe the chain of countries it may have passed through, then name which theory's reading fits your item best and why.
(b) Describe one company you know that operates in more than one country, and run it through one of the three theories in two or three sentences.

Memory hook: one shirt, three stories.

7. Read the figures four ways: the Gini index and the arrow

Now read real figures with Week 2's four questions. The first set measures inequality inside each of seven countries. Picture a pizza cut among ten friends. If everyone gets a slice of the same size, the split is perfectly equal. If one friend takes the whole pizza, it is perfectly unequal. The Gini index puts a number on where a country sits between those two ends.

The Gini index is a measure of how unequally income or consumption is spread across a population, read on a 0-to-100 scale where 0 would mean everyone has the same and 100 would mean one household has everything.

There is one more word to know before you read the figures.

A consumption measure is a way of measuring living standards by what households spend on and use, rather than by the income they receive; most low- and middle-income countries' Gini figures use it.

The figures come from the World Bank Poverty and Inequality Platform, as published by Our World in Data, for 2022.

Gini index for seven countries, 2022, on the 0-to-100 scale, World Bank Poverty and Inequality Platform via Our World in Data
Country	Gini index, 2022
Slovakia	24.1
Norway	26.9
Sweden	31.6
Germany	33.7
United States	41.7
Brazil	51.9
South Africa	54.1

Worked example — the 2022 Gini figures, read four ways. Take the five steps in order.

What is measured? The Gini index, how unequally income or consumption is spread across a country's households, on a scale where 0 would be perfect equality and 100 perfect inequality.
Over whom? Households in seven countries, each from a household survey the platform dates to 2022, as published by Our World in Data.
What does it show? Work it one step at a time.
- The scale: the World Bank Poverty and Inequality Platform publishes the index on a 0-to-1 scale, so a value read as 0.417 becomes 0.417 × 100 = 41.7 on the 0-to-100 scale.
- The widest gap: South Africa 54.1 − Slovakia 24.1 = 30.0 points on the 0-to-100 scale.
- A closer pair: United States 41.7 − Norway 26.9 = 14.8 points on the 0-to-100 scale.
- The middle: lined up from lowest to highest, the fourth of the seven values, Germany at 33.7, is the median of this set.
- The caveat: high-income countries' figures measure income after taxes and benefits, while most low- and middle-income countries' figures use a consumption measure, what households spend and use, so a cross-country comparison is made with care.
What does it not show? A Gini value says how spread out incomes are, not how high they are. Neither figure says why one country is more unequal than another.
Correlation or cause? Neither. These are descriptions of survey estimates for a named year, not a test of what causes inequality.

In words: among these seven countries in 2022, South Africa's incomes were the most unequally spread and Slovakia's the least, and the figures do not say why.

Notice the unit. A gap between two Gini values is counted in points on the 0-to-100 scale. A Gini value is not a percentage of anything, so "14.8 percentage points" would be the wrong unit.

In practice (your tools). In any free spreadsheet, type the seven Gini values into A1 through A7. In A8, type =MEDIAN(A1:A7) to get 33.7. In A9, type =A7-A1 with South Africa in A7 and Slovakia in A1 to get 30. If a downloaded file shows a value on the 0-to-1 scale, type it in B1 and type =B1*100 in B2 to put it on the 0-to-100 scale.

The second reading is about an arrow. Across the world, richer countries tend to have longer lives. That pattern is an association, a correlation. It does not say which way the arrow runs. Higher income may support better health through clinics and clean water. Better health may support higher income, because healthy people can work and learn. And other conditions, such as peace or good roads, may shape both at once.

Misconception check — "richer countries live longer, so money makes people live longer." Students often read the wealth-and-life-expectancy pattern as a one-way cause. It is tempting, because the story sounds right. But a correlation across countries does not show which way the arrow runs, or whether a third condition drives both. The cure: write "tends to come with," and name at least two directions the arrow could run.

Misconception check — "a low Gini means a rich country." You may also read a low Gini as a sign of wealth. A Gini value measures spread, not level. Two countries could share a Gini value while one is many times richer than the other. The cure: ask "how equal?" and "how rich?" as two separate questions.

A limitation to keep in view: every figure in this section is a survey estimate, and surveys differ in design from country to country. That is one more reason the caveat about income and consumption is said aloud every time.

Memory hook: spread is not level, and an arrow has two ends.

For more on these figures and the three theories, see this module's Readings & Resources page.

Key terms

Global stratification — The ranking of the world's countries into layers by wealth, power, and well-being, the same kind of layering found inside one society drawn across the whole world. (first used: 1. See the world's layers: global stratification and income groups)
GNI per capita — A country's gross national income divided by the number of people who live there, an average in dollars per person per year that says nothing about how the income is shared. (first used: 1. See the world's layers: global stratification and income groups)
Income group — One of the World Bank's four classes of countries, low, lower-middle, upper-middle, and high income, assigned by GNI per capita against dollar thresholds that are reset every July. (first used: 1. See the world's layers: global stratification and income groups)
GDP per capita — A country's gross domestic product, the value of everything produced inside its borders in a year, divided by its population; an average that hides how the output is shared. (first used: 2. Measure development: averages, lives, and schooling)
Life expectancy — The number of years a newborn would live on average if the death rates of the present day held for its whole life, a common measure of a population's health. (first used: 2. Measure development: averages, lives, and schooling)
Years of schooling — The amount of formal education people in a country receive, counted in years, used as a direct measure of a population's education. (first used: 2. Measure development: averages, lives, and schooling)
Human Development Index — A composite score that combines life expectancy, years of schooling, and income per person into one number, so countries can be ranked on more than income alone. (first used: 2. Measure development: averages, lives, and schooling)
HDI — The short name for the Human Development Index, the composite score built from life expectancy, years of schooling, and income per person. (first used: 2. Measure development: averages, lives, and schooling)
Extreme poverty — Living on less than the International Poverty Line, the World Bank's threshold for the lowest level of income or consumption used to count the world's poorest people. (first used: 3. Draw the line: extreme poverty and the International Poverty Line)
International Poverty Line — The World Bank's dollar-a-day threshold for extreme poverty, set at 3.00 dollars a day in 2021 international prices since June 2025, after 2.15 dollars a day in 2017 prices. (first used: 3. Draw the line: extreme poverty and the International Poverty Line)
Modernization theory — The view, associated with Rostow's 1960 book The Stages of Economic Growth, that low-income countries can develop through stages of industrialization and cultural change; critics call it ethnocentric for assuming one path modeled on the West. (first used: 4. The first explanation: modernization theory)
Dependency theory — The view that wealthy core nations prosper by drawing resources from poorer nations, so the poverty of the poorer nations is produced by the relationship between them rather than by a late start. (first used: 5. The second and third explanations: dependency and world systems)
World-systems theory — Wallerstein's account, from his 1974 book The Modern World-System, of one world economy whose countries hold core, semi-periphery, or periphery positions in a global division of labor. (first used: 5. The second and third explanations: dependency and world systems)
Core nations — In world-systems theory, the wealthy, industrialized countries at the center of the world economy that gain the most from its exchanges. (first used: 5. The second and third explanations: dependency and world systems)
Semi-periphery — In world-systems theory, the countries between the core and the periphery, which are drawn on by the core and in turn draw on the periphery. (first used: 5. The second and third explanations: dependency and world systems)
Periphery — In world-systems theory, the poorest countries of the world economy, which mostly supply raw materials and low-paid labor to wealthier nations. (first used: 5. The second and third explanations: dependency and world systems)
Globalization — The growing flow of goods, money, people, and ideas across national borders, which ties distant economies and societies more closely together. (first used: 6. Follow the shirt: globalization and the garment factory)
Multinational corporation — A company that owns or controls production, offices, or sales in more than one country while keeping its headquarters in one home country. (first used: 6. Follow the shirt: globalization and the garment factory)
Gini index — A measure of how unequally income or consumption is spread across a population, read on a 0-to-100 scale where 0 would mean everyone has the same and 100 would mean one household has everything. (first used: 7. Read the figures four ways: the Gini index and the arrow)
Consumption measure — A way of measuring living standards by what households spend on and use, rather than by the income they receive; most low- and middle-income countries' Gini figures use it. (first used: 7. Read the figures four ways: the Gini index and the arrow)

Summary

Global stratification ranks countries into layers, the way Week 7's stratification ranks households.
The World Bank's four income groups classify countries by GNI per capita, not people.
GNI and GDP per capita are averages; they hide how income is shared.
Life expectancy, years of schooling, and the HDI measure development beyond money.
The International Poverty Line is 3.00 dollars a day in 2021 prices; moving it moved the count.
Modernization theory looks inside a country; critics call it ethnocentric.
Dependency theory looks at ties between richer and poorer nations; world-systems theory adds the semi-periphery.
A Gini value measures spread, not level, and gaps are counted in points.
Richer countries tend to have longer lives; the correlation does not show the arrow's direction.

Check your understanding

Work these before looking at the answers — they are ungraded, and the answers (with reasoning) are at the bottom of the page.

An illustrative country has a gross national income of 9 billion dollars and a population of 3 million. Find its GNI per capita and name its income group under the fiscal year 2027 thresholds.
A downloaded file shows two illustrative countries' Gini values on the 0-to-1 scale as 0.35 and 0.29. Put both on the 0-to-100 scale, find the gap between them, and name the unit of the gap.
An illustrative region counts 40,000 people below its poverty line. The next year the line is raised, incomes do not change, and the count becomes 52,000. Did poverty in the region rise? Explain.
Name the theory behind each statement. (a) "Our nation will prosper once it adopts modern industry." (b) "Our nation sits between richer buyers and poorer suppliers in one world economy." (c) "Our nation is poor because richer nations take its resources cheaply."

Answers (worked reasoning — read after attempting)

Divide the total by the population: 9,000,000,000 ÷ 3,000,000 = 3,000 dollars per person. That is above 1,175 and not above 4,635, so the country falls in the lower-middle income group. The label classifies the country; it does not tell you what a typical resident earns.
Multiply each by 100: 0.35 × 100 = 35 and 0.29 × 100 = 29. The gap is 35 − 29 = 6 points on the 0-to-100 scale. It is not 6 percent or 6 percentage points, because a Gini value is not a percentage.
The count rose by 52,000 − 40,000 = 12,000 people, but nobody's income changed. The rise came entirely from moving the line, so it is a change in the definition, not a change in the region's poverty. This is the same lesson as the World Bank's 2025 change.
(a) Modernization theory: the cure sits inside the country, on a road of stages. (b) World-systems theory: a semi-periphery position between core and periphery. (c) Dependency theory: poverty produced by the relationship with richer nations.

Next up in this module: the Readings & Resources page, the lecture tutorial, the practice set, the quiz, the discussion, and the assignment.

Next week the same reading method turns to race and ethnicity, and you test a category model against census data.

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