Absolute Income Gain Global income Distribution ● Study from 1988-2008 ● Global middle class ○ China and India ■ Large absolute income gains ● Top 1% ○ Major income growth ● Lower-middle income class(in wealthy country) ○ Minor, or no gain at all Absolute vs Relative income measures ● Absolute gains ○ Measuring real increase ■ y+500/year ○ Useful for measuring living standards ○ Illustrates poverty reduction ○ Hides inequality ■ Rich will have more gain ■ While poor gain more in percentage Absolute income gain ex) Income Group Absolute Gain (USD/year) Bottom 20% (Global poor) + 10– 10–50 40th–60th (Global middle) + 200– 200–400 (China/India peak) 80th–90th (Rich-country lower-middle) + 10– 10–50 (near-zero growth) Top 1% +$5,000+ ● Relative gain ○ Measures percentage change in income ■ 10% a year ○ Better at measuring inequality ○ Relative position ○ Does not show actual impact Income Group Relative Gain (%) Bottom 20% +20–40% 40th–60th +80–150% 80th–90th +5–15% Top 1% +60–80%