Has the income share of the middle and upper-middle been stable over time, or is its current homogeneity across the world the outcome of a process of convergence? The 'Palma Ratio' revisited
The earlier papers where 'Palma Ratio' is discussed Homogeneous middle vs heterogeneous tails, and the end of 'inverted-U': the share of the rich is what it is all about (2011) and Globalizing inequality: 'Centrifugal' and 'Centripedal' forces at work
A short discussion of 'Palma Ratio' here.:
"He found that the ‘middle classes’ – more accurately the middle income groups between the ‘rich’ and the ‘poor’ (defined as the five ‘middle’ deciles, 5 to 9) – tend to capture around half of GNI – Gross National Income wherever you live and whenever you look. The other half of national income is shared between the richest 10% and the poorest 40% but the share of those two groups varies considerably across countries.
The earlier papers where 'Palma Ratio' is discussed Homogeneous middle vs heterogeneous tails, and the end of 'inverted-U': the share of the rich is what it is all about (2011) and Globalizing inequality: 'Centrifugal' and 'Centripedal' forces at work
A short discussion of 'Palma Ratio' here.:
"He found that the ‘middle classes’ – more accurately the middle income groups between the ‘rich’ and the ‘poor’ (defined as the five ‘middle’ deciles, 5 to 9) – tend to capture around half of GNI – Gross National Income wherever you live and whenever you look. The other half of national income is shared between the richest 10% and the poorest 40% but the share of those two groups varies considerably across countries.
Palma suggested distributional politics is largely about the battle between the rich and poor for the other half of national income, and who the middle classes side with.
So, we’ve given this idea a name – ‘the Palma’ (brilliant eh?) or the Palma Ratio. It’s defined as the ratio of the richest 10% of the population’s share of gross national income (GNI), divided by the poorest 40% of the population’s share. We think this might be a more policy-relevant indicator than the Gini, especially when it comes to poverty reduction."
P.S. Palma also studies the 'upper-middle', the deciles D7-D-9. But his studies are over a short period. I would not be surprised if studies over longer periods suggest different deciles.
P.S. Palma also studies the 'upper-middle', the deciles D7-D-9. But his studies are over a short period. I would not be surprised if studies over longer periods suggest different deciles.
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