Ethnic Stratification and Income Inequality Around the World

The paper starts from the assumption that inequality within countries is a very important topic for research also in the area of globalization. Data show that there exist huge differences between countries and world regions (continents) in this regard, with Latin America and Sub-Saharan Africa exhibiting extremely high, most European countries and Japan rather low income inequalities. Neither sociological nor economic research have theorized and investigated this issue systematically. The general hypothesis of the paper is: Economic inequality can only be explained if we see the close interaction between class stratification and ethnic differentiation. For a test of these hypotheses, a new aggregate data file has been produced, including characteristics about the ethnic structure and history, the socio-demographic and economic structure (population, level of development etc.), and the political system (democracy, federalism, welfare spending) of 130 countries around the globe. A regression analysis shows that both ethnic diversity and a history of slavery are significant determinants of income inequality; the same is true for land distribution, democracy and welfare spending. Some implications of these findings for policy and further research are discussed.