Emerging economies' '1 percenters' on rise

A new study of the world's top-earning 1 percent found that many more are from emerging economies than in previous decades, a trend largely driven by China.

Advanced economies still contribute most of the world's top 1 percent of earners, with a 79 percent share in 2012. However, the share is declining, as it is 7 percent to 11 percent lower than between 1988 and 2005.

China's proportion of the global 1 percent rose from 1.3 percent to 3.4 percent between 2005 and 2012, and was well above its 2002 share, a mere 0.2 percent.

"Although China is, roughly speaking, the joint biggest economy in the world, it still has a much smaller share of the global top 1 percent than the United States, but it's clearly increasing, and rapidly," says Paul Segal, senior lecturer of economics at King's College London.

Segal is co-author of a paper published on July 27 by researchers at the University of Oxford and King's College called Who Are the Global Top 1%? It is based on a study that looked at household surveys and tax records from advanced and developing nations.

"China is the most important factor in increasing the share of emerging economies in the global top 1 percent," Segal says.

"It's economic growth in China that's driving it, combined with the fact that inequality has risen a lot over the past 30 years or so.

"This means that while the incomes of almost everyone in China have gone up, the incomes of the rich have gone up more. Therefore, they are more likely to get into that global top 1 percent."

In addition to the downward trend in advanced economies' share of the top 1 percent, the study also found a decline in global inequality.

While Segal says he was "surprised and pleased" to find global inequality was on the downturn, he adds that it remains higher than at any time before the 21st century.

"That means that all the tensions that inequality is likely to bring along are still there," he says.

angus@mail.chinadailyuk.com

(China Daily European Weekly 07/29/2016 page3)