World of Work Report 2013 - International Labour Organization

C. Middle-income groups in emerging
and developing economies
In developing and emerging economies the size
of the middle-income group has increased…
As noted, in developing and emerging economies absolute incomes are more frequently
used to determine the size of the middle-income group; many different
intervals are set in the literature (see box 2.1). In this study, an income of USD 4
to USD 13 per day is used to identify the middle-income group in low-income
economies, while an income of USD 6 to USD 20 per day is used for lowermiddle-income
economies.17 In upper-middle-income economies, an interval of
USD 10 to USD 50 is used.18 These intervals exclude the vulnerable group living
with an income just above the poverty line in each group of economies (referred
to as the “floating group”). While not currently living below the relevant poverty
line, those in this group have a high risk of falling into poverty. The results are
shown in figure 2.5.
Figure 2.5 Sizes of different income groups in emerging and developing economies, 1999–2010
600
Panel A. Low-income economies
1600
Panel B. Lower-middle-income economies
500
1200
400
Millions
300
Millions
800
200
400
100
0
1999 2002 2005 2008 2010
0
1999 2002 2005 2008 2010
Poor (< USD 2)
Floating group
(USD 2–4)
Middle-income group
(USD 4–13)
Poor (< USD 2)
Floating group
(USD 2–6)
Middle-income group
(USD 6–20)
1600
Panel C. Upper-middle-income economies
1200
Millions
800
400
0
1999 2002 2005 2008 2010
Poor (< USD 4)
Floating group
(USD 4–10)
Middle-income group
(USD 10–50)
17. Based on World Bank classification of member economies (July 2012); all figures in 2005
purchasing power parity.
18. In upper-middle income-economies poverty is defi ned as less than USD 4 per day, following the
methodology of Ferreira et al. (2013).
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2. Income distribution and middle-income groups across the world