In contrast to reported improvements in world inequality, we document the decline of the world middle class between 2002 and 2012, as interpreted by the bipolarization approach. Using a balanced panel of countries representing more than 80% of the world's population, we find that reduced inequality within the world's bottom 50% is the main driver of higher relative bipolarization; while that inequality reduction among the bottom 50% together with a widening gap in mean income between the world's top
and bottomhalves help explain the observed rise in absolute bipolarization. The crucial role of Chinese economic progress is also underlined.