Global distributions of capital and labor incomes: capitalization of the global middle class

Ranaldi, Marco (2025) Global distributions of capital and labor incomes: capitalization of the global middle class. World Development, 188. ISSN 0305-750X

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Abstract

This article studies the global distributions of capital and labor incomes among individuals in 2000 and 2016. By constructing a novel database covering approximately 80% of the global output and 60% of the world population, two major findings stand out. First, the world underwent an important process of capitalization. The share of world individuals with positive capital income rose from 20% to 32%. Second, the global middle class benefited the most, in relative terms, from such a capitalization process, with China being the main driver of this global trend. The findings of this paper are robust to changes in the income definition, top-income and functional income distribution adjustments. The global composition of capital and labor incomes is more equal today than it was twenty years ago.

Item Type:	Article
Additional Information:	© 2024 The Author(s)
Divisions:	LSE
Subjects:	H Social Sciences > HB Economic Theory J Political Science H Social Sciences > HD Industries. Land use. Labor
Date Deposited:	07 Jan 2025 11:54
Last Modified:	07 Jan 2025 11:54
URI:	http://eprints.lse.ac.uk/id/eprint/126608

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