The integration of developing economies such as China and India into the global economy in the last few decades has helped lift millions out of poverty. The introduction of their labour forces into the global economy increased growth and income in these economies which also resulted in a decline in global inequality. The World Bank’s latest “Global Economic Prospects” report shows that the second wave of change in the global labour market will play out over the next two decades, with developing economies contributing to all of the addition in the global skilled labour force, as the number of skilled workers in advanced economies is expected to decline. The rising level of skill and education in developing economies will also lift potential global growth and continue to reduce global inequality.
The global skilled workforce is likely to increase from 1.66 billion workers in 2011 to 2.16 billion by 2040. Skilled workers have been defined as those having at least nine years of education. Since improvement in the level of education and skill tends to increase income, rising income in the developing world will lead to a reduction in inequality. The global Gini coefficient is estimated to decline from 65.8 in 2012 to 62.6 by 2030. However, income from other sources may still increase inequality. The way things progress in India, to a large extent, will determine how fast income convergence happens and the level of global inequality declines. The World Bank in this context notes: “…fast-growing EMDEs (emerging market and developing economies) with a large number of poor, such as India, which accounts for 28 percent of the world’s poor in 2013, will continue to contribute to the reduction of global inequality.”
Read More – LiveMint