This paper provides a working definition of what the middleincome trap is. It begins by laying out different approaches to defining the mit and by presenting as well as classifying the most. It now further specifies countries as having low, lowermiddle, uppermiddle, or highincome economies. Xis leading chinas economy into the middleincome trap. To understand middle income trap, classification of countries by the world bank in terms of percapita income is to be understood. The hollowing of the american middle class the share of the american adult population that is middle income is falling, and rising shares are living in economic tiers above and below the middle. No single definition for middle class exists, but its often considered between 67% and 200% the median income and is based on a variety of factors including wealth and consumption. The current form of the income classification has been used since 1989. This definition has been sourced from the world bank and can be. While the term highincome is often used interchangeably with first world and developed country, the technical definitions of these terms differ. World bank list of economies june 2017 economy income group 181 st.
The economic consequences of mortality amenable to high. Middleincome countries mics definition investopedia. The change readiness index, which was designed on the premise that no business or society is immune to change, tries to capture the capability of a country to anticipate, prepare for, manage, and respond to a wide range of change drivers. The distribution of household income and the middle class congressional research service 3 indication of the income of the typical household than is the mean average, which can be pulled up by a relatively small number of high income households in the upper end of the distribution. Where you live matters, the post notes, since median income varies drastically by location. Wdi middleincome countries taking greater share of. Upper middleincome country how is upper middleincome country abbreviated. Official pdf, 52 pages world bank documents world bank group. A world bank classification of a country in accordance with several indicators, one being economic. The general consensus in the literature leads us to define a poor umic as any country with a gni. Characteristics of poverty in upper middle income countries. Middle income trap is a situation for middle income countries where they are not able to move up to the higher income status due to the operation of several adverse factors. Pdf challenges to an uppermiddle income country researchgate.
The term middleincome trap mit usually refers to countries that have experienced rapid growth and thus quickly reached middleincome status, but then failed to overcome that income range to further catch up to the developed countries. The hollowing of the middle has proceeded steadily for four decades, and it may have reached a. If households are lined up from poorest to richest and then divided into ten equally sized groups i. The share of income captured by the middle class has. The share for lower middle income countries doubled from 4 percent in 2002 to 8 percent in 2017 while the share for upper middle income countries increased from to 27 percent. The growing size and incomes of the upper middle class. It divides countries into four groupslow income, lower middle income, upper middle income, and high incomeusing gross national income gni per capita valued annually in us dollars using a threeyear average exchange rate world bank, 1989. In the context of the paris club, countries not considered lowermiddleincome or lowincome countries. It divides countries into four groupslow income, lower middle income, upper middle income, and high incomeusing gross national income gni per capita valued annually in us dollars using a. Pdf on aug 1, 20, ding lu and others published challenges to an uppermiddle income country find, read and cite all the research you. The new role that middleincome countries mics play in the global landscape obliges interna. What are the salary levels of upper, middle and lower.
Middleincome countries, as defined today, accounted for less than a fifth of the global economy 17 percent even at the beginning of the 20th century. Middleincome countries and the system of international. Where do i fall in the american economic class system. Distinguishing middleincome countries from lowincome and high. Tracking the middleincome trap asian development bank. What incomes define upper, middle and rich classes in. In the 1983 wdr, the middle income group was split into lower middle and upper middle groups, and in 1989 a high income country definition was introduced. These countries receive nonconcessional rescheduling terms, originally with flat repayment schedules, but in the 1990s increasingly with graduated payment schedules that have a maturity of up to 15 years and a grace period of 23 years for commercial credits. Upper middle income data world bank open data data. Statistics singapore key household income trends, 2018.
The asian development banks engagement with middleincome countries, linked. The distribution of household income and the middle class. In the years since, the nature and risks of the trap have been hotly debated by economists, business leaders, media. Oecd glossary of statistical terms uppermiddleincome. The countrys economy has made great strides since independence in 1968, and mauritius is now an upper middleincome economy.
The index measures the amount of human capital that a child born today can expect to attain by age 18, given the risks of poor health and poor. Distinguishing middleincome countries from lowincome and highincome countries 3 7. China has grown into an upper middle income economy, but its a still far from joining the higher income club source. The worlds middle income countries mics are a diverse group by size, population, and income level. The hollowing of the american middle class pew research.
World bank country and lending groups world bank data. Similarly, percentages for middleincome economies were derived through a simple average of percentages assigned to lowermiddle and uppermiddle income economies. Upper middleincome country how is upper middleincome. World bank group engagement in uppermiddleincome countries. The middle class constitutes a slim majority of the u. Middle income countries are home to 75% of the worlds population and 62% of the world. Middleincome trap world bank documents world bank group.
The classification is updated each year on july 1 st. Because the largest proportion of the worlds poor live in middle income countries, we argue that gni per capita is not an appropriate sole measure for development need. This is because middleincome economies are diverse in their regions, sizes, populations, and income levels. Hic highincome country, lmic lower middleincome country, umic upper middleincome country. Definitions of low, lowmiddle, middleupper and upper income. However, by 2017, their share had doubled to 35 percent. We start by defining four income groups of gdp per capita in 1990 ppp dollars. Now economies are further specified, with middle economies broken down into two additional groups. Vincent and the grenadines upper middle income 185 sudan lower middle income 186 suriname upper middle income 187 swaziland lower middle income 188 sweden high income. Middle income countries lmics and upper middle income countries umics see annex.
Namibia the human capital index hci database provides data at the country level for each of the components of the human capital index as well as for the overall index, disaggregated by gender. Appendix 1 definitions of low, lowmiddle, middleupper and upper income countries. Key challenges include managing the transition to a knowledgebased economy and adapting to the impacts of climate change. The world bank classifies the worlds economies into four income groups high, uppermiddle, lowermiddle, and low. World bank thats where xi is pushing the country in the wrong direction. The income and status of a person vary from state to state, it includes their standard of living lifestyle and many more things, so lets begin. Different weights to each economy based on countryspecific characteristics such as economic size, territory or other variables are not applied. The term first world commonly refers to countries that aligned themselves. From 20 to 2018, median monthly household income from. We will address the rest of this paper to the middle and upperincome countries and regions of the world, as a very different discussion of geography and economics would be required to address policy in the poorest places collier, 2007. Below poverty line bpl in this category a person and his family of four 4 some how manage t. The definition of community varied widely, often including an entire municipality.
A related method is to define the middle class by the middle income deciles visagie and posel, 20. Updated country income classifications for the world banks 2020 fiscal year are available here. Middle income countries are home to 75% of the worlds population and 62% of the worlds poor. The world banks classification of countries by income.
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