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Gross national income per capita

By OECD on Apr 13, 2007
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National income per capita

While per capita gross domestic product is the indicator most commonly used to compare income levels two other measures are preferred by many analysts. These are per capita gross national income (GNI) and net national income (NNI).

Definition

GNI is defined as GDP plus net receipts from abroad of wages and salaries and of property income.

Wages and salaries from abroad are those that are earned by residents, that is, by persons who essentially live and consume inside the economic territory but work abroad (this happens in border areas on a regular basis) or for persons that live and work abroad for only short periods (seasonal workers) and whose centre of economic interest thus remains in their home country. Guest-workers and other migrant workers who live abroad for twelve months or more are considered to be resident in the country where they are working. Such persons may send part of their earnings to relatives at home, but these remittances are treated as transfers between resident and non-resident households and do not enter into net receipts from abroad of wages and salaries.

Property income from abroad includes interest, dividends and all or part of the retained earnings of foreign enterprises owned fully or in part by residents. In most countries, net receipts of property income account for most of the difference between GDP and GNI. Note that retained earnings of foreign enterprises owned by residents may not actually return to the residents concerned, and, in some countries, there are restrictions on the repatriation of profits. Receipt of retained earnings is an imputation, and, since there is no actual transaction, it is necessary to impute an outflow of the same amount. The imputed outflow is treated as a capital transaction (a reinvestment of earnings abroad) and not as an outflow of property income. Countries with large stocks of outward foreign direct investment may be shown as having large receipts of property income from abroad and therefore high GNI even though much of the property income may never actually be returned to the country.

Depreciation, which is deducted from GNI to obtain NNI, is the decline in the market value of fixed capital assets – dwellings, buildings, machinery, transport equipment and physical infrastructure – through wear and tear and obsolescence.

Comparability

Both measures are compiled according to the definitions of the 1993 System of National Accounts. There are, however, practical difficulties in the measurement both of international flows of wages and salaries and property income and of depreciation. It is for that reason that GDP per capita is the most widely used indicator of income or welfare, even though it is theoretically inferior to either GNI or NNI.

Long-term trends

In the chart, countries are ranked according to GNI, which is usually around 16 or 17% higher than NNI. Note that the country rankings are not much affected by the choice of income measure; countries that would be more than one place lower in the ranking if NNI were used are Japan, and Denmark, and those that would be more than one place higher in the ranking are Greece, Ireland, Sweden and the United Kingdom.

Over the period shown, the growth of per capita GNI mirrors that of per capita GDP, with Ireland, Norway, Korea and Poland at the top end and Germany, Italy and Japan with the lowest rates of growth.

Source

OECD (2006), National Accounts of OECD Countries, OECD, Paris.

Further information

Analytical publications

OECD (2003), The Sources of Economic Growth in OECD Countries, OECD, Paris.
OECD (2007), OECD Economic Outlook: December No. 80 – Volume 2006 Issue 2, OECD, Paris.

Statistical publications

Maddison, Angus (2003), The World Economy: Historical Perspectives, OECD, Paris, also available on CD-ROM, www.theworldeconomy.org.

Methodological publications

OECD (2007), Understanding National Accounts, OECD, Paris.
OECD (2000), OECD Glossaries, System of National Accounts, 1993 – Glossary, OECD, Paris.
UN, OECD, IMF, Eurostat (eds.) (1993), System of National Accounts 1993, United Nations, Geneva, http://unstats.un.org/unsd/sna1993.

Online databases

Websites

OECD Economic Outlook – Sources and Methods, www.oecd.org/eco/sources-and-methods.

Source

OECD Factbook 2007: Economic, Environmental and Social Statistics - ISBN 92-64-02946-X -

Summary

Time Series Data

Range 1970 to 2005
(35 years)
Scale Yearly
Rows 36

Columns 32

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Data Summary

Showing last 6 rows and first 4 columns

Year	Australia	Austria	Belgium	Canada	Czech Republic	Denmark	Finland	France	Germany	Greece	Hungary	Iceland	Ireland	Italy	Japan	Korea	Luxembourg	Mexico	Netherlands	New Zealand	Norway	Poland	Portugal	Slovak Republic	Spain	Sweden	Switzerland	Turkey	United Kingdom	United States	Slovenia

2000	26,483	28,171	27,247	27,708	14,498	28,214	25,825	26,279	25,313	20,988	11,708	28,220	24,841	25,692	25,824	16,273	44,238	8,874	28,997	19,414	35,937	10,608	17,906	10,811	20,909	26,948	32,918	6,869	25,609	35,162	16,662
2001	27,532	28,538	28,441	28,506	15,257	29,492	27,488	27,540	26,033	22,174	12,926	29,292	25,977	26,641	26,587	17,222	45,645	8,984	30,662	20,568	36,907	10,970	18,569	11,627	21,973	27,322	32,334	6,077	27,319	35,775	17,752
2002	28,768	29,593	29,709	29,154	16,156	29,949	28,698	28,038	26,773	24,244	13,952	30,309	27,366	27,256	27,190	18,475	47,533	9,210	31,574	21,397	36,708	11,488	19,500	12,714	23,403	28,277	33,639	6,460	29,560	36,319	18,503
2003	30,373	31,455	30,504	30,083	17,400	30,668	28,348	28,660	27,394	25,867	14,847	30,251	29,498	27,043	28,220	19,355	49,249	9,414	32,216	22,554	38,582	11,875	18,346	13,482	24,591	29,965	36,041	6,682	30,483	37,498	19,745
2004	31,462	32,843	31,675	31,751	18,314	32,232	30,361	29,287	28,732	27,412	15,548	31,897	31,151	27,586	29,739	20,771	53,299	9,989	34,527	23,205	42,062	12,511	19,029	14,708	25,672	31,007	37,638	7,186	32,470	39,590	21,268
2005	32,863	34,043	32,901	33,495	19,692	34,208	31,383	30,401	29,853	29,212	16,477	34,922	33,199	28,002		22,078	57,392		35,435	24,089	47,467	13,433	19,617	15,575	27,028	32,025	39,197	7,698	33,637	41,657	22,698
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