Living conditions around the world vary from country to country.Some countries have very large economies,but the majority of their citizens are poor.Other countries have smaller economies,but the majority of their citizens are not poor.So the size of a country's economy isn't the only factor that determines how wealthy its citizens are.The size of its population is also an important factor. Anther factor is how a country's wealth is distributed between the rich and the poor.
Let's look at some examples.This chart shows the world's 5 largest economies is 2015.It ranks the countries by their Gross Domestic Product or GDP. The GDP is one way of measuring the size of an economy. It is the total value of the goods and services produced in a country in a year. As you can see, according to this chart,the US and China had the largest economies.
According to the chart, India had the thrid largest economy in the world. Its economy was bigger than Japan's. However, the average living conditions in Japan are much higher than in India. One reason for this is the difference in population. India has a much larger population, so its wealth is distributed among a much larger.You can find this information by checking a country's GDP per capita. Per capita means per person. If two countries have the same GDP, but one country has half the number of people,its GDP per capita is twice as large.
Another important factor is how the wealth of a country is shared. In some countries much of the wealth is concentrated in just a few people. For example, in the US ,just 5% of the population had more than 70% of the wealth! This shows that many US citizens are not wealthy despite the size of their economy. In fact, the wealth share held by the wealthiest 10% was more than 10 times bigger than the rest of the population.
As we have seen, much of the wealth of the US is concentrated in just a few people. 10% of its population had an estimated 75% of the wealth in 2015. In this chart we see some comparisons with other countries. In contrast to the US, 10% of Japan's population had less than half of the total wealth. In China, in 2014, the estimated share of the top 10% was 64%, but this number is rising. Russia had the highest concentration of wealth, at over 80%! Russia had the highest concentration of wealth, at over 80%! India, which has one of the largest economies, has the largest share of the world's poorest people. Its richest 10% have 370 times the share of wealth than its poorest 10%.
A major challenge for a government is to improve the living conditions of its citizens. As we have seen growing an economy isn't enough. Population growth and distribution of wealth are also important factors. Improving education and developing job skills can help people move up in an economy. With better education and training , the poor can increase their ability to get better jobs and raise their income.
However, taxes are needed to pay for social services,including health and education. Some countries tax the rich at a higher rate than the poor. However, if taxes are too high, it can discourage investment and risk taking. This is because investors won't take risks unless the rewards are high. So, as you can see,these are complex issues.