Economic Snapshot | Trade and Globalization

GDP-per-worker comparisons around the world

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Snapshot for November 14, 2007.

GDP-per-worker comparisons around the world

by L. Josh Bivens

Integration of the rich United States economy with that of poorer economies around the world provides plenty to hope for and plenty to worry about. The greatest hope is that integration will provide a tool to aid living standards growth in the world’s poorest countries. The fear is that such integration will powerfully drag on living standards growth in the developed world, especially for those workers thrown into starkest competition in the global labor market. Growing inequality and depressed living standards for millions of these workers could result from the wrong political response to this integration.

The chart below gives a sense of just how much room there is for (even partial) convergence of global income. It shows gross domestic product (GDP) per worker, arranged in descending order, for 170 countries in 2000.1

The 75/25 World Economy

The horizontal distance from one country to the next (or, from the vertical axis in the case of the United States) shows the size of a given country’s population. Perhaps the quickest way to summarize its message is that 75% of the world population lives in countries where GDP per worker is less than 25% that of the United States.

1.  It should be noted that this is not a good measure of productivity, as the large US lead in this number is driven almost entirely by longer working hours per employed person relative to other rich nations.

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