Short Answer
The Gini coefficient is one of the most widely used summary measures of income inequality. In the United States, it distills the entire income distribution into a single number between 0 and 1, where 0 means perfect equality and 1 means perfect inequality. Recent Census Bureau data show that U.S. income inequality increased in 2021 for the first time since 2011, driven by real income declines at the bottom of the distribution, while the Bureau of Economic Analysis has expanded state-level Gini statistics to allow more detailed geographic comparisons.
Key Numbers
- 0: Gini coefficient value indicating perfect equality — everyone has the same income.
- 1: Gini coefficient value indicating perfect inequality — one person has all income.
- $70,784: Real median U.S. household income in 2021, statistically unchanged from 2020.
- 2021: First year since 2011 that U.S. income inequality increased, as measured by the Gini index.
- August 14, 2025: BEA released updated prototype statistics on income distribution and Gini coefficients for each state and D.C.
- 1884–1965: Life of Corrado Gini, the Italian statistician who developed the coefficient.
- 0 to 100%: The Gini index is often expressed as a percentage rather than a 0-to-1 decimal.
Explanation
The Gini coefficient summarizes how much the distribution of income among individuals or households deviates from a perfectly equal distribution. It is based on the Lorenz curve, a graph that plots the cumulative share of income received by the cumulative percentage of the population, ordered from poorest to richest. In a perfectly equal society, the Lorenz curve would be a 45-degree line from the origin; the Gini coefficient measures the area between that line of equality and the observed curve, divided by the total area under the line of equality.
Because the coefficient condenses the entire distribution into one statistic, it is especially useful for comparing inequality across countries, states, or time periods. A higher Gini value means greater inequality. For example, a value of 0.50 indicates a more unequal distribution than a value of 0.35. The measure can be applied to income, wealth, consumption, or other distributions, but income is the most common application in U.S. official statistics.
In the United States, the Census Bureau publishes the Gini index each year based on the Current Population Survey Annual Social and Economic Supplement. The Bureau of Economic Analysis has also developed prototype state-level Gini coefficients, released in August 2025, which show how personal income is distributed across households in each state and the District of Columbia.
Definition
The Gini coefficient, also called the Gini index or Gini ratio, is a statistical measure of inequality within a distribution. It was developed by Italian statistician Corrado Gini in the early 20th century. The coefficient ranges from 0 to 1, where 0 represents perfect equality and 1 represents perfect inequality. When expressed as a percentage from 0 to 100, it is commonly referred to as the Gini index.
In the context of U.S. income statistics, the Gini coefficient measures how unevenly income is spread across households. A low value means incomes are relatively similar; a high value means a large share of total income is concentrated among a small number of households.
How the Statistic Is Calculated
There are two main ways to calculate the Gini coefficient, and both produce the same result. The first method uses the Lorenz curve. The x-axis represents the cumulative percentage of the population from poorest to richest, and the y-axis represents the cumulative percentage of total income. The Gini coefficient is the ratio of the area between the line of perfect equality and the Lorenz curve to the total area under the line of perfect equality.
The second method interprets the Gini as the expected income difference between any two people, relative to the mean income. If two people are chosen at random from the population, the average difference in their incomes, divided by twice the mean income, equals the Gini coefficient. This interpretation makes the measure intuitive: a Gini of 0.40 means the expected income gap between two random individuals is 80 percent of the mean income.
Methodology
U.S. income inequality statistics are primarily produced by the U.S. Census Bureau using the Current Population Survey Annual Social and Economic Supplement. The survey collects detailed income data from a nationally representative sample of households. The Census Bureau then constructs the income distribution, calculates cumulative income shares, and derives the Gini index.
The Bureau of Economic Analysis has developed a separate set of prototype statistics that distribute personal income across households in each state and the District of Columbia. These statistics also include Gini coefficients and are designed to complement the Census Bureau’s measures by using BEA personal income concepts. Both sources define income at the household level, but they may differ in coverage, income definitions, and methodology.
Why It Matters
The Gini coefficient matters because it provides a single, comparable indicator of economic inequality. Policymakers, researchers, and the public use it to track whether economic growth is broadly shared or concentrated. Rising inequality can affect social cohesion, economic mobility, and policy debates over taxes, transfers, and wages.
Because the Gini index is standardized, it allows comparisons across states and countries with very different population sizes and income levels. A state with a higher Gini coefficient has a more unequal income distribution than a state with a lower coefficient, even if both have similar median incomes.
Historical Data
The Census Bureau has tracked U.S. income inequality for decades. In 2021, the bureau reported that income inequality increased for the first time since 2011. The increase was driven by real declines in income at the bottom of the distribution, rather than by gains at the top. Real median household income was $70,784 in 2021, statistically unchanged from the previous year.
| Year | Key Development |
|---|---|
| 2011 | Last year before 2021 in which U.S. income inequality increased, as measured by the Gini index. |
| 2020 | Median household income was statistically unchanged; inequality did not increase. |
| 2021 | Real median household income was $70,784; Gini index increased for the first time since 2011. |
| 2025 | BEA released updated prototype state-level Gini coefficients for all states and D.C. |
Year-over-Year Change
The 2021 increase in the Gini index marked a notable shift. According to the Census Bureau,
Declines in real income at the bottom of the income distribution resulted in increased income inequality as measured by the Gini index.
This means the change was not primarily about rising top incomes but about falling incomes among lower-income households, which widened the gap between the bottom and the rest of the distribution.
Year-over-year changes in the Gini coefficient can be small in absolute terms but still statistically significant. Because the measure is based on a large survey, the Census Bureau tests whether changes are statistically different from zero before reporting them as increases or decreases.
State Comparison
The BEA’s August 2025 prototype statistics allow comparisons of income inequality across states and the District of Columbia. These state-level Gini coefficients summarize how personal income is distributed within each state. While the BEA data do not rank states in a simple list, they enable users to identify which states have more or less concentrated income distributions.
For interpreting state Gini values, the following general ranges are often used as a guide:
| Gini coefficient range | Interpretation |
|---|---|
| Below 0.30 | Relatively low inequality |
| 0.30 to 0.40 | Moderate inequality |
| 0.40 to 0.50 | High inequality |
| Above 0.50 | Very high inequality |
Ranking Table
Although the Census Bureau and BEA do not publish a single official ranking of all states by Gini coefficient in the sources cited here, the Gini scale itself can be ranked by inequality level. The table below ranks the standard interpretation categories from lowest to highest inequality.
| Rank | Inequality level | Typical Gini range |
|---|---|---|
| 1 | Low inequality | Below 0.30 |
| 2 | Moderate inequality | 0.30 to 0.40 |
| 3 | High inequality | 0.40 to 0.50 |
| 4 | Very high inequality | Above 0.50 |
Limitations of the Data
The Gini coefficient has several limitations. It summarizes the entire distribution in one number, so it cannot show where inequality occurs — for example, whether the gap is between the middle and the top or between the bottom and the middle. Two very different income distributions can have the same Gini coefficient.
The measure is also sensitive to the income definition and survey methodology. Different surveys may produce different Gini values for the same population. In addition, the Gini coefficient is more sensitive to changes in the middle of the distribution than to changes at the extremes, which can mask important shifts among the very poor or very rich.
Factors Behind the Trend
The 2021 increase in U.S. income inequality was driven by real declines in income at the bottom of the distribution. The Census Bureau noted that these declines occurred even as median household income remained statistically unchanged. This pattern suggests that lower-income households experienced disproportionate economic stress during the period, while middle and upper incomes were more stable.
Broader factors that can influence the Gini coefficient include changes in employment, wages, government transfers, tax policy, and the business cycle. During economic downturns, incomes at the bottom often fall more sharply, which can raise the Gini index even if average incomes do not change much.
Source & Data Date
Primary sources: U.S. Census Bureau, Income in the United States: 2021 report and Gini Index topic page; U.S. Bureau of Economic Analysis, Measuring Income Distribution: A Primer on the Gini Coefficient, published August 14, 2025; Our World in Data, What is the Gini coefficient?; and Britannica, Gini coefficient. The most recent Census income inequality data cited cover 2021, released September 13, 2022. BEA state-level prototype statistics were released August 14, 2025.
FAQ
What does a Gini coefficient of 0 mean?
A Gini coefficient of 0 indicates perfect equality, meaning every person or household has exactly the same income. In this case, the Lorenz curve would lie exactly on the 45-degree line of perfect equality.
What does a Gini coefficient of 1 mean?
A Gini coefficient of 1 indicates perfect inequality, meaning one person or household receives all the income and everyone else receives nothing. This is a theoretical extreme that does not occur in real-world national data.
How is the Gini coefficient calculated?
It is calculated from the Lorenz curve by dividing the area between the line of perfect equality and the observed cumulative income curve by the total area under the line of perfect equality. Equivalently, it equals the expected income difference between two randomly chosen people divided by twice the mean income.
What is the current U.S. Gini coefficient?
The U.S. Census Bureau reported that the Gini index increased in 2021 for the first time since 2011, driven by real income declines at the bottom of the distribution. The exact annual value is published in the Census Bureau's Income in the United States report; the 2021 real median household income was $70,784.
Why does the Gini coefficient matter for policy?
It provides a single, comparable measure of inequality, helping policymakers and researchers track whether economic growth is broadly shared. Rising Gini values can signal widening gaps that may affect social cohesion, economic mobility, and debates over taxes and transfers.
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