This chapter focuses on the implications for inequality of recent ILO estimates of the labour income share and distribution. Using household surveys for 95 countries, mainly from the ILO Harmonized Microdata collection, we estimate the labour income of the self‐employed to produce an internationally comparable labour income share dataset. Furthermore, we use the same methodology to obtain the first‐ever estimates of the labour income distribution. The labour income distribution estimates complement the two main data sources used until now to study inequality: expenditure distribution and total income distribution. Crucially, labour income distribution data have a reasonable coverage for all country income groups, unlike other data sources that are characterized by undercoverage for either lower‐income countries (regarding data on total income) or higher‐income countries (regarding data on expenditure). The estimates show that the global labour income share declined substantially between 2004 and 2017. In high‐income countries, the decline in the labour share is driven largely by decreases in the average labour income of the self‐employed. This is consistent with a scenario in which new forms of work erode the earning power of the self‐employed. Focusing on income inequality, the use of the labour income distribution as a proxy for the total income distribution is found to be a more reliable proxy than the commonly used expenditure distribution data. Moreover, the estimates suggest that the use of expenditure as a proxy of income have led earlier studies to underestimate total income inequality severely in less developed countries. Hence, global income inequality is likely to be much higher than previously assumed.

The primary goal of the ILO is to work with member States towards achieving full and productive employment and decent work for all. This goal is elaborated in the ILO Declaration 2008 on Social Justice for a Fair Globalization, 1 which has been widely adopted by the international community. Comprehensive and integrated perspectives to achieve this goal are embedded in the Employment Policy Convention of 1964 (No. 122), the Global Employment Agenda (2003) and-in response to the 2008 global economic crisis-the Global Jobs Pact (2009) and the conclusions of the Recurrent Discussion Reports on Employment (2010 and 2014). The Employment Policy Department (EMPLOYMENT) is engaged in global advocacy and in supporting member States in placing more and better jobs at the center of economic and social policies and growth and development strategies. Policy research and knowledge generation and dissemination are essential components of the Employment Policy Department's activities. The resulting publications include books, country policy reviews, policy and research briefs, and working papers. 2 The Employment Policy Working Paper series is designed to disseminate the main findings of research on a broad range of topics undertaken by the branches of the Department. The working papers are intended to encourage the exchange of ideas and to stimulate debate. The views expressed within them are the responsibility of the authors and do not necessarily represent those of the ILO.