Income Per Natural
Lant Pritchett and Michael Clemens have devised a new measure of wealth: “income per natural” (.pdf file here). Rather than measuring the income of people who are now residents of a country, they estimate the income earned by people who were born in that country.
For poor countries there is a significant difference. The Liberian-born make 50% more than Liberian residents. The income of the Samoa- & Guyana-born is about twice the income of the residents of Samoa & Guyana (respectively).
“Two of every five living Mexicans who have escaped poverty did so by leaving Mexico; for Haitians it is four out of five.”
Traditional measures of income tend to mask the fact that migration has made a lot of migrants richer. Imagine a man who moves from earning €10,000 in Poland (an above-average wage) to £15,000 in the UK (a below-average wage). Simple arithmetic says that he has reduced the average income of both countries.
“Of income and incomers,” by Tim Harford