| Hello, *|NOME|* In Issue 25 of the IMDS Letter, sent on August 22, we told our readers that IMDS was conducting a study to characterize the changes at the top of the Brazilian pyramid seeking to identify differences between Brazil and other countries. We know that a number of factors influence income and wealth transitions across the lifespan – and therefore social mobility – but it is plausible that these factors carry different weights depending on where an individual is in the social pyramid. For the poorest, and even for those in the middle of the pyramid, in addition to individual commitment and effort, access to education, health, sanitation and job opportunities are among the main factors that can produce upward social mobility. Other factors could be added to this list, such as, for example, the region in which the worker's productive insertion occurs, or the sector in which the insertion occurs – more modern and dynamic sectors have higher growth rates and, consequently, greater opportunity for individual growth. On the other hand, the factors that act on the mobility of individuals at the upper end of the pyramid are associated with the dynamics of the business environment, the degree of individual freedom, and the institutional characteristics that encourage or discourage entrepreneurship. To some extent, they are also associated with the characteristics of the country's political organization: countries with a strong concentration of political power tend to concentrate resources in their support groups and establish barriers to such access for other groups. In this case, mobility at the top tends to be reduced. In contrast, in countries with more dynamic and democratic capitalism, mobility at the top tends to be higher. The study carried out by IMDS, based on data from Forbes magazine, shows that between 2013 and 2022 of the 95 largest fortunes in Brazil, 48% were new to this group. China has an even higher rate: 65%. The United States (37%) and India (35%) have lower rates. Another relevant aspect is the degree of concentration of wealth, expressed by the percentage of wealth of the 5 richest. Of the four countries analyzed, Brazil is the only one that shows a reduction in the concentration of wealth among the richest. In 2013, the five richest households ("TOP 5") held 34.2% of the group's total wealth and in 2022 this percentage fell to 26.5%. This phenomenon was also identified – although with less intensity – among the 10 richest families ("TOP 10") and among the "TOP 50". These same statistics reveal that in China, despite greater mobility, there has been a concentration of wealth at the very top. In the TOP 5 it went from 18.6% to 20.7%. In the TOP 50 it went from 75% to 75.4%. In the U.S., the concentration of wealth in the TOP 5 went from 29.5% to 31.4% and in the TOP50 it went from 81.4% to 85.6%. In the case of India, there is an increase in concentration up to the TOP 25 group, but a reduction from the TOP 5 and 50. Another relevant aspect of the study concerns the average position in which new entrants enter the TOP 95 list. In the case of Brazil, the 46 new entrants on average enter the middle of the distribution (position 53), the same occurring in China. In India, the group of entrants - only 33 - enter at the bottom of the pyramid, position 64. Yet, in the United States, the average entry position of the 35 new entrants is even lower: 65. This and other information can be found in the Technical Note "Studying mobility at the top of the pyramid: an analysis based on Forbes Lists", which has just been published on our website. Be sure to read it!
See you in the next “Letter from IMDS”! Paulo Tafner CEO |
