75p.; Prepared within Project on Rising Income Inequality

This study reviews evidence that overall within-country inequality, although showing no trends from 1960-80, increased after 1980-85, focusing on developing and transitional countries. It explores trends in rural-urban, intrarural, and intraurban inequality of income, poverty risk, health, and education, and the offsetting trends in inequality hypothesis (OTI). OTI claims that underlying the overall inequality trend has been a tendency for rising intrasectoral inequality to be offset by falling rural-urban inequality. Analysis of the limited available data indicate that there is no such pattern. Different regions and countries experienced different, though substantial, trends and timings of change in different types of rural-urban inequality. For example, rural-urban gaps in mean consumption and poverty incidence have narrowed in Africa and widened in Asia, but they show no global trend, usually moving in the same direction as overall inequality. Such change can be explained in part by two demographic forces affecting almost all developing countries since the 1950s, but a