Does economic convergence diverge along the income distribution? Evidence from a decile-based analysis

Abstract

This paper contributes to the literature on economic convergence by exploring an overlooked aspect: the potential heterogeneity of convergence processes across different segments of the income distribution. While previous analyses have typically focused on per capita income or GDP, this study adopts a more granular perspective by examining convergence at per capita income deciles. Drawing on data from 25 countries spanning 1980 to 2019, the analysis reveals a distinct pattern of divergence in the convergence process: higher-income deciles exhibit stronger convergence than lower-income ones, with this divergence widening in recent decades. These findings highlight the uneven nature of economic convergence, demonstrating that reducing cross-country income disparities is especially challenging for low-income groups — those most in need of improved well-being and economic catch-up.