So You Think You’re Poor?

by Vince

Check out the above chart and read the full run down here. Money quote:

Notice how the entire line for the United States resides in the top portion of the graph? That’s because the entire country is relatively rich. In fact, America’s bottom ventile is still richer than most of the world: That is, the typical person in the bottom 5 percent of the American income distribution is still richer than 68 percent of the world’s inhabitants.

Now check out the line for India. India’s poorest ventile corresponds with the 4th poorest percentile worldwide. And its richest? The 68th percentile. Yes, that’s right: America’s poorest are, as a group, about as rich as India’s richest.

Brankovic notes how much it matters where you are born:

One’s income thus crucially depends on citizenship, which in turn means (in a world of rather low international migration) place of birth. All people born in rich countries thus receive a location premium or a location rent; all those born in poor countries get a location penalty.

It is easy to see that in such a world, most of one’s lifetime income will be determined at birth.

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