Age-structural Model of Per-capita Income

Per-capita Income Model

The age-structural model of per-capita income (GNI per capita, $US, Atlas Method), uses the World Bank’s four per-capita income classes (Fig. 1), the range of which is adjusted annually as prior-year income values are adjusted for inflation: low, lower-middle, upper-middle, and high. The logistic regression analysis of the income sector indicates that:

  • states with populations under 5.0 million are likely to attain all categories at younger median ages than more populous states,
  • states relying on natural resource wealth (>15% of GDP) are likely to attain all categories at younger median ages than non-resource reliant states; and
  • states in the low and lower-middle income categories that have been involved in a high-intensity conflict (>1000 battle-related deaths per year) are likely to enter categories later than others. Note that most conflicts (both high and low intensity) occur within states in the low and lower-middle income categories.
  • that the point at which 50 percent of all countries are expected to be within the lower-middle income category, or a higher category (upper-middle or high) is at a median age of 21.6 (±0.3) For the upper-middle income category, that point is at 30.9 (±0.5) years, and for the high category, at 36.9 (±0.5) years.

 

Figure 1.  The suite of curves representing the probability of being assessed in one of the World Bank’s four income classes: low income (L), lower-middle income (LM+) or a higher category; upper-middle income (UM+) or a higher category; and high income (H). Iran is positioned by its 2015 median age of 29.5 years, and has been assessed in the upper-middle income category.

 

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