Where in the World are you? Assessing the Importance of Circumstance and Effort in a World of Different Mean Country Incomes and (Almost) No Migration
Suppose that all people in the world are allocated only two characteristics: country where they live and income class within that country. Assume further that there is no migration. This paper shows that 90 percent of variability in people's g...
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| Format: | Policy Research Working Paper |
| Language: | English |
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World Bank, Washington, DC
2012
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| Online Access: | http://documents.worldbank.org/curated/en/2008/01/8969542/world-assessing-importance-circumstance-effort-world-different-mean-country-incomes-almost-no-migration-vol-1-1 http://hdl.handle.net/10986/6391 |
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okr-10986-63912021-04-23T14:02:31Z Where in the World are you? Assessing the Importance of Circumstance and Effort in a World of Different Mean Country Incomes and (Almost) No Migration Milanovic, Branko ABSOLUTE VALUE AVERAGE INCOME AVERAGE SHARE BENCHMARK CONSUMER PRICE INDEX CORRELATION COEFFICIENT CORRELATION COEFFICIENTS COUNTRY CHARACTERISTICS COUNTRY OBSERVATIONS CUMULATIVE DISTRIBUTION DEPENDENT VARIABLE DEVELOPMENT ASSISTANCE DISTRIBUTION FUNCTIONS DISTRIBUTION OF INCOME ECONOMETRICS ECONOMIC ANALYSIS ECONOMIC GROWTH ECONOMIC INEQUALITY ECONOMIC PERFORMANCE ECONOMIC POLICY ECONOMIC REVIEW ELASTICITY EMPIRICAL ANALYSIS EQUAL COUNTRIES EXCHANGE RATES GINI COEFFICIENT GINI COEFFICIENTS GINI INDEX GROSS DOMESTIC INCOME HIGH INCOME HOUSEHOLD SURVEYS INCOME INCOME DIFFERENCES INCOME DISTRIBUTION INCOME DISTRIBUTION DATA INCOME DISTRIBUTIONS INCOME EFFECT INCOME GROUP INCOME GROUPS INCOME INEQUALITY INCOME LEVEL INCOME LEVELS INCOME SCALE INCOME SHARES INCOMES INEQUALITY INEQUALITY MEASURE INTERGENERATIONAL MOBILITY LABOR MARKET LORENZ CURVE LORENZ CURVES LOTTERY LOW INCOME MEAN INCOME MEAN INCOMES MEAN LOG DEVIATION MEASUREMENT ERROR MEDIAN POSITION MIDDLE CLASS MILLION PEOPLE NATIONAL INCOME NORMAL DISTRIBUTION ORDER DOMINANCE PER CAPITA INCOME POLICY RESEARCH POLITICAL ECONOMY POOR COUNTRY POOR PEOPLE POOR PERSON PUBLIC ECONOMICS PUBLIC GOOD RELATIVE IMPORTANCE RELATIVE INCOME RELATIVE POSITION SIMULATIONS SOCIAL MOBILITY TAXATION WAGES WEALTH WESTERN EUROPE Suppose that all people in the world are allocated only two characteristics: country where they live and income class within that country. Assume further that there is no migration. This paper shows that 90 percent of variability in people's global income position (percentile in world income distribution) is explained by only these two pieces of information. Mean country income (circumstance) explains 60 percent, and income class (both circumstance and effort) 30 percent of global income position. The author finds that about two-thirds of the latter number is due to circumstance (approximated by the estimated parental income class under various social mobility assumptions), which makes the overall share of circumstance unlikely to be less than 75-80 percent. On average, "drawing" one-notch higher income class (on a twenty-class scale) is equivalent to living in a 12 percent richer country. Once people are allocated their income class, it becomes important, not only whether the country they are allocated to is rich or poor, but whether it is egalitarian or not. This is particularly important for the people who "draw" low or high classes; for the middle classes, the country's income distribution is much less important than mean country income. 2012-05-24T21:10:24Z 2012-05-24T21:10:24Z 2008-01 http://documents.worldbank.org/curated/en/2008/01/8969542/world-assessing-importance-circumstance-effort-world-different-mean-country-incomes-almost-no-migration-vol-1-1 http://hdl.handle.net/10986/6391 English Policy Research Working Paper; No. 4493 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
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World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English |
| topic |
ABSOLUTE VALUE AVERAGE INCOME AVERAGE SHARE BENCHMARK CONSUMER PRICE INDEX CORRELATION COEFFICIENT CORRELATION COEFFICIENTS COUNTRY CHARACTERISTICS COUNTRY OBSERVATIONS CUMULATIVE DISTRIBUTION DEPENDENT VARIABLE DEVELOPMENT ASSISTANCE DISTRIBUTION FUNCTIONS DISTRIBUTION OF INCOME ECONOMETRICS ECONOMIC ANALYSIS ECONOMIC GROWTH ECONOMIC INEQUALITY ECONOMIC PERFORMANCE ECONOMIC POLICY ECONOMIC REVIEW ELASTICITY EMPIRICAL ANALYSIS EQUAL COUNTRIES EXCHANGE RATES GINI COEFFICIENT GINI COEFFICIENTS GINI INDEX GROSS DOMESTIC INCOME HIGH INCOME HOUSEHOLD SURVEYS INCOME INCOME DIFFERENCES INCOME DISTRIBUTION INCOME DISTRIBUTION DATA INCOME DISTRIBUTIONS INCOME EFFECT INCOME GROUP INCOME GROUPS INCOME INEQUALITY INCOME LEVEL INCOME LEVELS INCOME SCALE INCOME SHARES INCOMES INEQUALITY INEQUALITY MEASURE INTERGENERATIONAL MOBILITY LABOR MARKET LORENZ CURVE LORENZ CURVES LOTTERY LOW INCOME MEAN INCOME MEAN INCOMES MEAN LOG DEVIATION MEASUREMENT ERROR MEDIAN POSITION MIDDLE CLASS MILLION PEOPLE NATIONAL INCOME NORMAL DISTRIBUTION ORDER DOMINANCE PER CAPITA INCOME POLICY RESEARCH POLITICAL ECONOMY POOR COUNTRY POOR PEOPLE POOR PERSON PUBLIC ECONOMICS PUBLIC GOOD RELATIVE IMPORTANCE RELATIVE INCOME RELATIVE POSITION SIMULATIONS SOCIAL MOBILITY TAXATION WAGES WEALTH WESTERN EUROPE |
| spellingShingle |
ABSOLUTE VALUE AVERAGE INCOME AVERAGE SHARE BENCHMARK CONSUMER PRICE INDEX CORRELATION COEFFICIENT CORRELATION COEFFICIENTS COUNTRY CHARACTERISTICS COUNTRY OBSERVATIONS CUMULATIVE DISTRIBUTION DEPENDENT VARIABLE DEVELOPMENT ASSISTANCE DISTRIBUTION FUNCTIONS DISTRIBUTION OF INCOME ECONOMETRICS ECONOMIC ANALYSIS ECONOMIC GROWTH ECONOMIC INEQUALITY ECONOMIC PERFORMANCE ECONOMIC POLICY ECONOMIC REVIEW ELASTICITY EMPIRICAL ANALYSIS EQUAL COUNTRIES EXCHANGE RATES GINI COEFFICIENT GINI COEFFICIENTS GINI INDEX GROSS DOMESTIC INCOME HIGH INCOME HOUSEHOLD SURVEYS INCOME INCOME DIFFERENCES INCOME DISTRIBUTION INCOME DISTRIBUTION DATA INCOME DISTRIBUTIONS INCOME EFFECT INCOME GROUP INCOME GROUPS INCOME INEQUALITY INCOME LEVEL INCOME LEVELS INCOME SCALE INCOME SHARES INCOMES INEQUALITY INEQUALITY MEASURE INTERGENERATIONAL MOBILITY LABOR MARKET LORENZ CURVE LORENZ CURVES LOTTERY LOW INCOME MEAN INCOME MEAN INCOMES MEAN LOG DEVIATION MEASUREMENT ERROR MEDIAN POSITION MIDDLE CLASS MILLION PEOPLE NATIONAL INCOME NORMAL DISTRIBUTION ORDER DOMINANCE PER CAPITA INCOME POLICY RESEARCH POLITICAL ECONOMY POOR COUNTRY POOR PEOPLE POOR PERSON PUBLIC ECONOMICS PUBLIC GOOD RELATIVE IMPORTANCE RELATIVE INCOME RELATIVE POSITION SIMULATIONS SOCIAL MOBILITY TAXATION WAGES WEALTH WESTERN EUROPE Milanovic, Branko Where in the World are you? Assessing the Importance of Circumstance and Effort in a World of Different Mean Country Incomes and (Almost) No Migration |
| relation |
Policy Research Working Paper; No. 4493 |
| description |
Suppose that all people in the world are
allocated only two characteristics: country where they live
and income class within that country. Assume further that
there is no migration. This paper shows that 90 percent of
variability in people's global income position
(percentile in world income distribution) is explained by
only these two pieces of information. Mean country income
(circumstance) explains 60 percent, and income class (both
circumstance and effort) 30 percent of global income
position. The author finds that about two-thirds of the
latter number is due to circumstance (approximated by the
estimated parental income class under various social
mobility assumptions), which makes the overall share of
circumstance unlikely to be less than 75-80 percent. On
average, "drawing" one-notch higher income class
(on a twenty-class scale) is equivalent to living in a 12
percent richer country. Once people are allocated their
income class, it becomes important, not only whether the
country they are allocated to is rich or poor, but whether
it is egalitarian or not. This is particularly important for
the people who "draw" low or high classes; for the
middle classes, the country's income distribution is
much less important than mean country income. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Milanovic, Branko |
| author_facet |
Milanovic, Branko |
| author_sort |
Milanovic, Branko |
| title |
Where in the World are you? Assessing the Importance of Circumstance and Effort in a World of Different Mean Country Incomes and (Almost) No Migration |
| title_short |
Where in the World are you? Assessing the Importance of Circumstance and Effort in a World of Different Mean Country Incomes and (Almost) No Migration |
| title_full |
Where in the World are you? Assessing the Importance of Circumstance and Effort in a World of Different Mean Country Incomes and (Almost) No Migration |
| title_fullStr |
Where in the World are you? Assessing the Importance of Circumstance and Effort in a World of Different Mean Country Incomes and (Almost) No Migration |
| title_full_unstemmed |
Where in the World are you? Assessing the Importance of Circumstance and Effort in a World of Different Mean Country Incomes and (Almost) No Migration |
| title_sort |
where in the world are you? assessing the importance of circumstance and effort in a world of different mean country incomes and (almost) no migration |
| publisher |
World Bank, Washington, DC |
| publishDate |
2012 |
| url |
http://documents.worldbank.org/curated/en/2008/01/8969542/world-assessing-importance-circumstance-effort-world-different-mean-country-incomes-almost-no-migration-vol-1-1 http://hdl.handle.net/10986/6391 |
| _version_ |
1764400272899047424 |