This article offers an evaluation of cross-national measures of ethnic socio-economic inequality. It demonstrates that the measures differ in important ways regarding empirical scope, conceptualization, measurement and aggregation. Despite significant advances in the measurement of ethnic inequality, all measures have shortcomings, such as limited and biased coverage, as well as measurement error from the underlying data sources. Moreover, the empirical convergence between conceptually similar measures is strikingly low: some of the measures show no or even negative covariation. Four replication studies also indicate that extant measures of ethnic inequality are generally not interchangeable. Scholars should therefore take the various features highlighted in this evaluation into account before employing any of them. Based on this conclusion, the article offers multiple suggestions for improving existing measures and developing new ones.

To what extent and under what conditions do democratic institutions reduce socioeconomic ethnic inequality? I argue that democratization reduces ethnic inequality by introducing electoral accountability, which facilitates a series of egalitarian policies. However, the effect of democratization is conditional on the distribution of resources under the previous, nondemocratic regime. Countries that were more ethnically unequal prior to democratization experience greater egalitarian effects following democratization. To examine the argument, I leverage multiple country‐ and group‐level measures of ethnic inequality. Using fixed effects regressions, instrumental variable analyses, and event studies, I demonstrate that democratization substantively reduces ethnic inequality, but mainly for countries with high predemocratic levels of inequality.