Middle-income trap

How it is used

The term became popular through World Bank research in the late 2000s. The usual cure discussed is a shift to growth based on innovation, education and productivity, though some economists question whether the trap really exists. Countries fall into, are stuck in or escape the middle-income trap.

Example sentences

1. South Korea is often cited as a country that escaped the middle-income trap.

2. Without higher productivity, the economy risks falling into the middle-income trap.

Common collocations

• escape the middle-income trap
• stuck in the middle-income trap
• fall into the middle-income trap
• upper-middle-income country

Related terms

• productivityHow much output is produced from a given amount of input, most often measured as output per worker or per hour worked.
• human capitalThe knowledge, skills, health and experience of workers, seen as an asset that raises productivity and income in the same way as machines or buildings.
• developing countryA country with a lower average income, less industrial output and weaker infrastructure than the rich industrialised countries.
• economic growthAn increase in the amount of goods and services an economy produces over time, usually measured as the percentage change in real GDP.
• advanced economyA rich, highly developed country with high income per person, modern industries and services, and well-established institutions.

More terms: Development and Inequality

• per capita
• emerging market
• inequality
• poverty line
• Gini coefficient
• informal economy
• sustainable development
• standard of living
• infrastructure
• income distribution
• redistribution
• brain drain