{"id":9008,"date":"2021-03-18T10:00:06","date_gmt":"2021-03-18T15:00:06","guid":{"rendered":""},"modified":"2025-04-23T23:57:10","modified_gmt":"2025-04-24T03:57:10","slug":"in-the-pandemic-indias-middle-class-shrinks-and-poverty-spreads-while-china-sees-smaller-changes","status":"publish","type":"short-read","link":"https:\/\/alpha.pewresearch.org\/pewresearch-org\/short-reads\/2021\/03\/18\/in-the-pandemic-indias-middle-class-shrinks-and-poverty-spreads-while-china-sees-smaller-changes\/","title":{"rendered":"In the pandemic, India\u2019s middle class shrinks and poverty spreads while China sees smaller changes"},"content":{"rendered":"\n<div class=\"wp-block-image\"><figure class=\"aligncenter size-640-wide\"><img decoding=\"async\" sizes=\"(max-width: 640px) 100vw, 640px\" src=\"https:\/\/alpha.pewresearch.org\/pewresearch-org\/wp-content\/uploads\/2021\/03\/FT_21.02.30_COVID-Econ_India-China_Featured-Image.png?w=640\" alt=\"In this split image, on one side, a staff member works on the production line of a diaper manufacturing plant in Sinnar, India. In the other image, a factory worker uses a drilling machine. (Punit Paranjpe\/AFP via Getty Images; Jian Wan\/Getty Images)\" class=\"wp-image-387577\" \/><figcaption>(Punit Paranjpe\/AFP via Getty Images; Jian Wan\/Getty Images)\n<\/figcaption><\/figure><\/div>\n\n\n\n<p class=\"wp-block-paragraph\">The economic crisis driven by the <a href=\"https:\/\/alpha.pewresearch.org\/pewresearch-org\/topics\/coronavirus-disease-2019-covid-19\/\">novel coronavirus<\/a> is having a <a href=\"https:\/\/alpha.pewresearch.org\/pewresearch-org\/global\/2021\/03\/18\/the-pandemic-stalls-growth-in-the-global-middle-class-pushes-poverty-up-sharply\/\">major impact on global living standards<\/a>, pushing millions of people out of the middle class or into poverty. India and China, the world\u2019s <a href=\"https:\/\/data.worldbank.org\/indicator\/NY.GDP.MKTP.PP.KD?view=chart\">third largest and largest economies<\/a>, respectively, exert significant influence on these trends. But the pandemic\u2019s economic impact on India and China has been very different.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Given that India and China also account for more than a third of the global population, with about 1.4 billion people each, the course of the pandemic in these two countries \u2013 and how each recovers \u2013 will have a substantial effect on changes in the distribution of income at the global level.<\/p>\n\n\n\n<!--more-->\n\n\n<div style=\"border-width:1px;padding-bottom:var(--wp--preset--spacing--20);padding-left:var(--wp--preset--spacing--30);padding-right:var(--wp--preset--spacing--30);padding-top:var(--wp--preset--spacing--20);--block-gap: inherit\" class=\"wp-block-prc-block-collapsible js-react-collapsible is-style-alternate has-background has-ui-beige-very-light-background-color has-border-color has-ui-beige-dark-border-color\" id=\"how-we-did-this\" data-wp-interactive=\"{&quot;namespace&quot;:&quot;prc-block\\\/collapsible&quot;}\" data-wp-context=\"{&quot;collapsibleId&quot;:&quot;how-we-did-this&quot;,&quot;isOpen&quot;:false}\" data-wp-class--is-open=\"context.isOpen\" data-wp-init--scroll-into-view=\"callbacks.onInitScrollIntoView\"><div class=\"wp-block-prc-block-collapsible__title\" data-wp-on--click=\"actions.onClick\"><div>How we did this<\/div><button class=\"wp-block-prc-block-collapsible__icon\"><span data-wp-bind--hidden=\"context.isOpen\"><i class=\"icon icon-library__light icon__circle-plus\"><svg style=\"width: 1em; height: 1em;\"><use xlink:href=\"https:\/\/alpha.pewresearch.org\/pewresearch-org\/wp-content\/plugins\/prc-icon-library\/build\/icons\/sprites\/light.svg#circle-plus\"><\/use><\/svg><\/i><\/span><span data-wp-bind--hidden=\"!context.isOpen\" hidden><i class=\"icon icon-library__light icon__circle-minus\"><svg style=\"width: 1em; height: 1em;\"><use xlink:href=\"https:\/\/alpha.pewresearch.org\/pewresearch-org\/wp-content\/plugins\/prc-icon-library\/build\/icons\/sprites\/light.svg#circle-minus\"><\/use><\/svg><\/i><\/span><\/button><\/div><div class=\"wp-block-prc-block-collapsible__content\">\n\n<p class=\"wp-block-paragraph\">The <a href=\"https:\/\/alpha.pewresearch.org\/pewresearch-org\/topics\/coronavirus-disease-2019-covid-19\/\">COVID-19 pandemic<\/a> has created an economic crisis, shuttering businesses and cutting jobs around the world. This analysis looks at how the downturn has affected the standard of living in India and China, the two most populous countries in the world.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The focus is on the distribution of people across five income tiers in 2020: poor, low income, middle income, upper-middle income and high income. See <a href=\"https:\/\/alpha.pewresearch.org\/pewresearch-org\/wp-content\/uploads\/2021\/03\/india-china-methodology.pdf\">the methodology<\/a> and an <a href=\"https:\/\/alpha.pewresearch.org\/pewresearch-org\/global\/2015\/07\/08\/a-global-middle-class-is-more-promise-than-reality\/\">earlier Pew Research Center report<\/a> for more on the definition and meaning of these tiers in a global context.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The key data source for the analysis is the World Bank\u2019s <a href=\"http:\/\/iresearch.worldbank.org\/PovcalNet\/home.aspx\">PovcalNet database<\/a>, which provides access to household survey data on either income or consumption for more than 160 countries. The latest year for which survey data on the numbers of people in each income tier are available is 2011 for India and 2016 for China. These benchmark estimates are extrapolated to 2020 using <a href=\"https:\/\/www.worldbank.org\/en\/publication\/global-economic-prospects\">World Bank estimates<\/a> of output growth through 2020. One projection is based on the World Bank\u2019s January 2020 forecasts of economic growth in 2020, and the other is based on its January 2021 estimates of growth in 2020. The difference between these two measures is used to represent the effect of the pandemic on the income distribution in each country. &nbsp;<\/p>\n\n<\/div><\/div>\n\n\n<div class=\"wp-block-image\"><figure class=\"alignright size-420-wide\"><a rel=\"attachment wp-att-15383\" href=\"https:\/\/alpha.pewresearch.org\/pewresearch-org\/short-reads\/2021\/03\/18\/in-the-pandemic-indias-middle-class-shrinks-and-poverty-spreads-while-china-sees-smaller-changes\/ft_2021-03-18_indiachina_01-png\/\"><img data-dominant-color=\"ebebea\" data-has-transparency=\"false\" style=\"--dominant-color: #ebebea;\" loading=\"lazy\" decoding=\"async\"  srcset=\"https:\/\/alpha.pewresearch.org\/pewresearch-org\/wp-content\/uploads\/sites\/20\/2021\/03\/ft_2021.03.18_indiachina_01.png?resize=480,545 480w, https:\/\/alpha.pewresearch.org\/pewresearch-org\/wp-content\/uploads\/sites\/20\/2021\/03\/ft_2021.03.18_indiachina_01.png?resize=782,888 782w, https:\/\/alpha.pewresearch.org\/pewresearch-org\/wp-content\/uploads\/sites\/20\/2021\/03\/ft_2021.03.18_indiachina_01.png?resize=840,954 840w\" sizes=\"(max-width: 480px) 480px, (max-width: 782px) 782px, 640px\" height=\"477\" width=\"420\" src=\"https:\/\/alpha.pewresearch.org\/pewresearch-org\/wp-content\/uploads\/sites\/20\/2021\/03\/ft_2021.03.18_indiachina_01.png?w=420\" alt=\"India is estimated to have seen a greater decrease in the middle class and a much sharper rise in poverty than China in the COVID-19 downturn\" class=\"wp-image-15383 not-transparent\" \/><\/a><\/figure><\/div>\n\n\n\n<p class=\"wp-block-paragraph\">While India plunged into a <a href=\"https:\/\/www.nytimes.com\/2021\/02\/26\/business\/india-economy-recession-recovery.html#:~:text=India's%20economic%20output%20grew%200.4,consecutive%20quarters%20of%20economic%20shrinkage.\">deep recession<\/a> in 2020, China was able to forestall a contraction. In January 2020, <a href=\"https:\/\/www.worldbank.org\/en\/publication\/global-economic-prospects\">economic forecasts<\/a> from the World Bank pointed to virtually the same growth in real gross domestic product (GDP) in India (5.8%) and China (5.9%) in 2020. In January 2021, nearly one year into the pandemic, the World Bank revised these growth estimates downward to -9.6% for India but forecast 2% growth for China.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">A new Pew Research Center analysis finds that the middle class in India is estimated to have shrunk by 32 million in 2020 as a consequence of the downturn, compared with the number it may have reached absent the pandemic. This accounts for <a href=\"https:\/\/alpha.pewresearch.org\/pewresearch-org\/global\/2021\/03\/18\/the-pandemic-stalls-growth-in-the-global-middle-class-pushes-poverty-up-sharply\/\">60% of the global retreat<\/a> in the number of people in the middle-income tier (defined here as people with incomes of $10.01-$20 a day).<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Meanwhile, the number of people who are poor in India (with incomes of $2 or less a day) is estimated to have increased by 75 million because of the COVID-19 recession. This, too, accounts for nearly 60% of <a href=\"https:\/\/alpha.pewresearch.org\/pewresearch-org\/global\/2021\/03\/18\/the-pandemic-stalls-growth-in-the-global-middle-class-pushes-poverty-up-sharply\/\">the global increase in poverty<\/a>. Perhaps not surprisingly, <a href=\"https:\/\/www.washingtonpost.com\/world\/asia_pacific\/india-coronavirus-jobs-economy\/2020\/09\/23\/6aab7d9c-f859-11ea-85f7-5941188a98cd_story.html\">media reports from India<\/a> point to a spike in participation in its rural employment program \u2013 originally intended to combat poverty in agricultural areas \u2013 as the many who have lost jobs in the reeling economy seek work. The number now participating is setting record highs in the program\u2019s 14-year history.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The change in living standards in China is more modest than in India. The largest impact in China is the estimated addition of 30 million people to the low-income tier (incomes of $2.01-$10 a day). The number of people in the middle-income tier likely decreased by 10 million, and poverty was virtually unchanged.<\/p>\n\n\n\n<div class=\"ui inverted segment wp-block-prc-block-callout undefined beige\">\n\n<h4 class=\"wp-block-heading\" id=\"defining-the-income-tiers\">Defining the income tiers<\/h4>\n\n\n<p class=\"wp-block-paragraph\">The population in each country is divided into five groups: poor, low income, middle income, upper-middle income and high income. The poor live on $2 or less daily, low income on $2.01-$10, middle income on $10.01-$20, upper-middle income on $20.01-$50 and high income on more than $50. All dollar figures are expressed in 2011 prices and <a href=\"https:\/\/www.worldbank.org\/en\/programs\/icp\">purchasing power parity dollars<\/a>, currency exchange rates adjusted for differences in the prices of goods and services across countries.<\/p>\n\n\n<p class=\"wp-block-paragraph\">The assignment to a group, or income tier, is based on a household\u2019s daily per capita income or consumption, a simple way of <a href=\"https:\/\/www.pewsocialtrends.org\/2015\/12\/09\/methodology\/\">controlling for differences in household size<\/a>. The terms \u201cincome\u201d and \u201cconsumption\u201d are used interchangeably for the sake of convenience, as are the terms \u201cmiddle income\u201d and \u201cmiddle class.\u201d An <a href=\"https:\/\/alpha.pewresearch.org\/pewresearch-org\/global\/2015\/07\/08\/a-global-middle-class-is-more-promise-than-reality\/\">earlier Pew Research Center report<\/a> discusses these concepts and the choice of income thresholds in greater detail.<\/p>\n\n<\/div>\n\n\n\n<p class=\"wp-block-paragraph\">The contrast in how living standards have evolved in India and China amid the pandemic is starker in the context of where they stood prior to the pandemic.<\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"alignright size-420-wide\"><a rel=\"attachment wp-att-15374\" href=\"https:\/\/alpha.pewresearch.org\/pewresearch-org\/short-reads\/2021\/03\/18\/in-the-pandemic-indias-middle-class-shrinks-and-poverty-spreads-while-china-sees-smaller-changes\/ft_2021-03-18_indiachina_02-png\/\"><img data-dominant-color=\"efefed\" data-has-transparency=\"false\" style=\"--dominant-color: #efefed;\" loading=\"lazy\" decoding=\"async\"  srcset=\"https:\/\/alpha.pewresearch.org\/pewresearch-org\/wp-content\/uploads\/sites\/20\/2021\/03\/ft_2021.03.18_indiachina_02.png?resize=480,630 480w, https:\/\/alpha.pewresearch.org\/pewresearch-org\/wp-content\/uploads\/sites\/20\/2021\/03\/ft_2021.03.18_indiachina_02.png?resize=782,1026 782w, https:\/\/alpha.pewresearch.org\/pewresearch-org\/wp-content\/uploads\/sites\/20\/2021\/03\/ft_2021.03.18_indiachina_02.png?resize=840,1102 840w\" sizes=\"(max-width: 480px) 480px, (max-width: 782px) 782px, 640px\" height=\"551\" width=\"420\" src=\"https:\/\/alpha.pewresearch.org\/pewresearch-org\/wp-content\/uploads\/sites\/20\/2021\/03\/ft_2021.03.18_indiachina_02.png?w=420\" alt=\"China has a larger middle class than India, where most people are low income\" class=\"wp-image-15374 not-transparent\" \/><\/a><\/figure><\/div>\n\n\n\n<p class=\"wp-block-paragraph\">Prior to the pandemic, it was anticipated that 99 million people in India would belong in the global middle class in 2020. A year into the pandemic, this number is estimated to be have been 66 million, cut by a third. Meanwhile, the number of poor in India is projected to have reached 134 million, more than double the 59 million expected prior to the recession. The poverty rate in India likely rose to 9.7% in 2020, up sharply from the January 2020 forecast of 4.3%.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Most people in India were in the global low-income tier in 2020. Some 1.20 billion people in India were expected to be in this tier in 2020 prior to the pandemic, accounting for 30% of <a href=\"https:\/\/alpha.pewresearch.org\/pewresearch-org\/global\/2021\/03\/18\/the-pandemic-stalls-growth-in-the-global-middle-class-pushes-poverty-up-sharply\/\">the world\u2019s low-income population<\/a>. This number is projected to have dropped to 1.16 billion as the COVID-19 downturn pushed more people into poverty.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In China, there are more people in the global middle- and upper-middle income tiers than in poverty and the low-income tier. Although about 10 million people in China are estimated to have fallen out of the middle class in the downturn, this is a small share of the 504 million who were in the middle class ahead of the pandemic. Likewise, the expansion of the low-income tier in China from 611 million to 641 million or the number of poor from 3 million to 4 million during the pandemic is comparatively modest in number.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Importantly, China accounted for <a href=\"https:\/\/alpha.pewresearch.org\/pewresearch-org\/global\/2021\/03\/18\/the-pandemic-stalls-growth-in-the-global-middle-class-pushes-poverty-up-sharply\/\">37% of the global middle-income population<\/a> heading into 2020. Because economic growth in China remained positive, even if slower than anticipated, the limited impact on its middle class helped to ease the strain on the global middle class.<\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"alignright size-420-wide\"><a rel=\"attachment wp-att-15363\" href=\"https:\/\/alpha.pewresearch.org\/pewresearch-org\/short-reads\/2021\/03\/18\/in-the-pandemic-indias-middle-class-shrinks-and-poverty-spreads-while-china-sees-smaller-changes\/ft_2021-03-18_indiachina_03-png\/\"><img data-dominant-color=\"efefee\" data-has-transparency=\"false\" style=\"--dominant-color: #efefee;\" loading=\"lazy\" decoding=\"async\"  srcset=\"https:\/\/alpha.pewresearch.org\/pewresearch-org\/wp-content\/uploads\/sites\/20\/2021\/03\/ft_2021.03.18_indiachina_03.png?resize=480,687 480w, https:\/\/alpha.pewresearch.org\/pewresearch-org\/wp-content\/uploads\/sites\/20\/2021\/03\/ft_2021.03.18_indiachina_03.png?resize=782,1119 782w, https:\/\/alpha.pewresearch.org\/pewresearch-org\/wp-content\/uploads\/sites\/20\/2021\/03\/ft_2021.03.18_indiachina_03.png?resize=840,1202 840w\" sizes=\"(max-width: 480px) 480px, (max-width: 782px) 782px, 640px\" height=\"601\" width=\"420\" src=\"https:\/\/alpha.pewresearch.org\/pewresearch-org\/wp-content\/uploads\/sites\/20\/2021\/03\/ft_2021.03.18_indiachina_03.png?w=420\" alt=\"India cut poverty sharply from 2011 to 2019, and China greatly boosted its middle- and upper-middle income populations\" class=\"wp-image-15363 not-transparent\" \/><\/a><\/figure><\/div>\n\n\n\n<p class=\"wp-block-paragraph\">For both India and China, the drop in living standards in 2020 is a sharp departure from recent trends. From 2011 to 2019, the number of poor in India is estimated to have decreased from 340 million to 78 million. The projected rise in poverty in 2020 when comparing pre-pandemic and revised figures \u2013 75 million \u2013 claws back several years of progress on this front for India. The retreat of India\u2019s middle class in 2020 \u2013 by 32 million \u2013 also looms large in the context of the addition of 57 million to this income tier from 2011 to 2019.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In China, there had been a sizable addition of 247 million people to the middle-income tier from 2011 to 2019. Meanwhile, the upper-middle income population had nearly quadrupled, from 60 million to 234 million. On both fronts, China alone had accounted for <a href=\"https:\/\/alpha.pewresearch.org\/pewresearch-org\/global\/2021\/03\/18\/the-pandemic-stalls-growth-in-the-global-middle-class-pushes-poverty-up-sharply\/\">the majority of the increase<\/a> in these tiers globally. Thus, the pandemic-driven pause on these fronts in China is also a letup for the world at large.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><em>Note: Here is <a href=\"https:\/\/alpha.pewresearch.org\/pewresearch-org\/wp-content\/uploads\/2021\/03\/india-china-methodology.pdf\">the methodology<\/a> for this report. <\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The course of the pandemic in India and China will have a substantial effect on changes in the distribution of income at the global level.<\/p>\n","protected":false},"author":584,"featured_media":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"sub_headline":"","sub_title":"","_prc_public_revisions":[],"_ppp_expiration_hours":0,"_ppp_enabled":false,"ai_generated_summary":"","apple_news_api_created_at":"2021-03-19T20:16:25Z","apple_news_api_id":"54b3a800-f387-4b5c-88a0-ae1845c0c89d","apple_news_api_modified_at":"2021-05-10T17:04:35Z","apple_news_api_revision":"AAAAAAAAAAAAAAAAAAAAAQ==","apple_news_api_share_url":"https:\/\/apple.news\/AVLOoAPOHS1yIoK4YRcDInQ","apple_news_cover_media_provider":"image","apple_news_coverimage":0,"apple_news_coverimage_caption":"","apple_news_cover_video_id":0,"apple_news_cover_video_url":"","apple_news_cover_embedwebvideo_url":"","apple_news_is_hidden":false,"apple_news_is_paid":"","apple_news_is_preview":false,"apple_news_is_sponsored":"","apple_news_maturity_rating":"","apple_news_metadata":"\"\"","apple_news_pullquote":"","apple_news_pullquote_position":"","apple_news_slug":"","apple_news_suppress_video_url":false,"apple_news_use_image_component":false,"apple_news_api_pending":"1713063420","relatedPosts":[{"key":"_94kitxo02","link":"https:\/\/alpha.pewresearch.org\/pewresearch-org\/global\/2021\/03\/18\/the-pandemic-stalls-growth-in-the-global-middle-class-pushes-poverty-up-sharply\/","postId":387691,"title":"The Pandemic Stalls Growth in the Global Middle Class, Pushes Poverty Up Sharply","permalink":"https:\/\/alpha.pewresearch.org\/pewresearch-org\/global\/2021\/03\/18\/the-pandemic-stalls-growth-in-the-global-middle-class-pushes-poverty-up-sharply\/","date":"2021-03-18 09:57:47","label":"Report"}],"datacite_doi":"","datacite_doi_citation":"","_prc_seo_qr_attachment_id":0,"spoken_article_player_enabled":true,"displayBylines":true,"footnotes":"","prc_watchers":[],"_prc_fork_parent":0,"_prc_fork_status":"","_prc_active_fork":0},"categories":[448,413,232,239,125,439,243,240],"bylines":[986],"collection":[],"datasets":[],"_post_visibility":[],"formats":[467],"_fund_pool":[],"languages":[],"regions-countries":[515],"research-teams":[525,519],"workflow-status":[],"class_list":["post-9008","short-read","type-short-read","status-publish","hentry","category-coronavirus-disease-covid-19","category-covid-19-the-economy","category-economic-conditions","category-economic-inequality","category-global-economy-trade","category-global-health","category-middle-class","category-poverty","bylines-rakesh-kochhar","formats-short-read","regions-countries-united-states","research-teams-global","research-teams-social-trends"],"label":"Short 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middle class shrinks amid COVID-19 as China sees less change","description":"The course of the pandemic in India and China will have a substantial effect on changes in the distribution of income at the global level.","og_title":"In the pandemic, India\u2019s middle class shrinks and poverty spreads while China sees smaller changes","og_description":"The course of the pandemic in India and China will have a substantial effect on changes in the distribution of income at the global level.","schema_type":"Article","noindex":false,"canonical_url":"","primary_terms":[],"custom_schema":[],"twitter_title":"In the pandemic, India\u2019s middle class shrinks and poverty spreads while China sees smaller changes","twitter_description":"The course of the pandemic in India and China will have a substantial effect on changes in the distribution of income at the global 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