What is 'Per Capita GDP '

Per capita GDP is a measure of the total output of a country that takes the gross domestic product (GDP) and divides it by the number of people in that country. The per capita GDP is especially useful when comparing one country to another, because it shows the relative performance of the countries. A rise in per capita GDP signals growth in the economy and tends to reflect an increase in productivity.

BREAKING DOWN 'Per Capita GDP '

GDP is one of the primary indicators of a country's economic performance. It is calculated by either adding up the annual incomes of all working-age citizens or by totaling the value of all final goods and services produced in the country during the year. Per capita GDP is sometimes used as a standard of living indicator, with a higher per capita GDP equating to a higher standard of living.

Productivity Measure

Per capita GDP can also be used to measure the productivity of a country's workforce, as it measures the total output of goods and services per each member of the workforce in a given nation. However, many economists state that a better measure of worker productivity may be GDP per hours worked. Per capita GDP does not take into account the influence of technology over a worker's output. If two countries each have a workforce that possesses an equal measure of per capita GDP, it appears that both nations hold an equal standard of living. However, a further examination of GDP per hours worked offers a different view of worker efficiency. The country with the lower GDP per hours worked actually enjoys more leisure time.

Singapore and Norway, whose output per worker was identical relative to the United States in 2013, hold distinct differences in per capita GDP per hours worked. The 1.41 measure applied to Singapore indicates that workers in that nation put in more hours than their Norwegian counterparts, whose metric stood at 0.83 in 2013.

Per Capita GDP Disparities

The vast differences in per capita GDP are exemplified by comparisons between developed and developing economies. At $132,099, Qatar had the highest 2015 worker output in the world when adjusted for purchasing power parity (PPP), a measure that pegs each nation's currency to the U.S. dollar for comparative purposes. By contrast, Ethiopia, which sits near the bottom of the global scale, held a per capita GDP of $687 in 2015. The marked disparity experiences a reversion when GDP per capita growth is examined. Ethiopia, in which crude exploration activity ramped up in 2014, experienced the highest global growth in output per worker in 2015, at 8.5%, whereas worker productivity in the oil-rich nation of Qatar experienced a contraction of 4.6%.

Individual Countries Ranked by Per Capita GDP

The International Monetary Fund ranks each country each year based on its per capita GDP. Here is a list of the top 10 economies in the world as per the IMF’s ranking for the year ending 2017 (it does not include non-sovereign entities like Macau and Hong Kong): 

  1. Qatar
  2. Luxembourg
  3. Singapore
  4. Brunei
  5. Ireland
  6. Norway
  7. Kuwait
  8. United Arab Emirates
  9. Switzerland
  10. San Marino

The United States was ranked 11th in the IMF's findings. 

RELATED TERMS
  1. Per Capita

    A Latin term that translates into "by head," basically meaning ...
  2. Income Per Capita

    Income per capita is a measure of the amount of money that is ...
  3. Developed Economy

    A developed economy is an economy with sustained economic growth, ...
  4. Net Debt Per Capita

    The net debt per capita is a measurement of the value of a government's ...
  5. Induced Taxes

    Within the context of macroeconomics and fiscal policy, a type ...
  6. Inflationary Gap

    An inflationary gap is a macroeconomic condition describing the ...
Related Articles
  1. Insights

    Healthiest And Safest European Economies

    Economic indicators are to economists what symptoms are to doctors: signs of the relative well-being of the patient.
  2. Insights

    Top 25 Developed and Developing Countries

    The difference between developed and developing countries, along with a list of the status of 25 nations around the world.
  3. Insights

    5 States with the Lowest GDPs Per Capita

    Learn about the top five states that have the lowest real gross domestic products (GDPs): Mississippi, Idaho, South Carolina, West Virginia and Arkansas.
  4. Taxes

    5 States With Low Taxes and High Income

    When it comes to saving for retirement, living in one of these five states with low taxes and high income can better position you to build your nest egg.
  5. Insights

    What the National Debt Means to You

    The U.S. deficit seems to grow every year. But how does it actually affect you?
  6. Insights

    Nominal vs. Real GDP

    GDP stands for gross domestic product and is the measure of the total economic output of the goods and services of a country.
  7. Personal Finance

    The Best and Worst Countries to Find a Job

    Which countries have the lowest and highest unemployment rates? The answers might surprise you.
  8. Taxes

    Countries With The Highest Taxes

    If you thought your taxes as an American were high, think again. Here's a list of the top five countries with the highest tax revenues as a percentage of GDP.
  9. Investing

    Why GDP Can Grow at 3%: The Skeptics Are Wrong

    Hard data including booming earnings show the economy will pick up steam
  10. Insights

    Explaining The World Through Macroeconomic Analysis

    From unemployment and inflation to government policy, learn what macroeconomics measures and how it affects everyone.
RELATED FAQS
  1. Is real GDP a better index of economic performance than GDP?

    Learn why real GDP is a better index for expressing the output of an economy, as it takes into account the factors that distort ... Read Answer >>
  2. What is GDP and Why Is It So Important To Investors?

    The gross domestic product (GDP) is one the primary indicators used to gauge the health of a country's economy. What does ... Read Answer >>
  3. How does the stock market affect gross domestic product (GDP)?

    Find out how the stock market affects gross domestic product (GDP) through two different channels: financial conditions and ... Read Answer >>
  4. How does the United States government measure economic growth?

    Find out how the Bureau of Labor Statistics and the Bureau of Economic Analysis measure economic growth in the United States ... Read Answer >>
  5. What is the correlation between money supply and GDP?

    Read about the two-way correlation between the total amount of money circulating in the economy and gross domestic product, ... Read Answer >>
  6. What Are the Best Measurements of Economic Growth?

    Learn how economists and statisticians track economic growth and why GDP might not be the best measurement of real economic ... Read Answer >>
Hot Definitions
  1. Treasury Yield

    Treasury yield is the return on investment, expressed as a percentage, on the U.S. government's debt obligations.
  2. Return on Assets - ROA

    Return on assets (ROA) is an indicator of how profitable a company is relative to its total assets.
  3. Fibonacci Retracement

    A term used in technical analysis that refers to areas of support (price stops going lower) or resistance (price stops going ...
  4. Ethereum

    Ethereum is a decentralized software platform that enables SmartContracts and Distributed Applications (ĐApps) to be built ...
  5. Cryptocurrency

    A digital or virtual currency that uses cryptography for security. A cryptocurrency is difficult to counterfeit because of ...
  6. Financial Industry Regulatory Authority - FINRA

    A regulatory body created after the merger of the National Association of Securities Dealers and the New York Stock Exchange's ...
Trading Center