Gross National Income (GNI) is defined as GDP (Gross Domestic Product; income generated by production activities on economic territory of that particular country) plus the net receipts from wages, salaries, property income taxes, and subsidies of the country's citizens abroad minus the income earned in the domestic economy by nonresidents.
While per capita gross domestic product is the indicator most commonly used to compare income levels, there are two other measures are generally preferred by analysts: per capita Gross National Income (GNI) and Net National Income (NNI). Whereas GDP refers to the income generated by production activities on the economic territory of the country, GNI measures the income earned by the residents of a country, whether generated on the domestic territory or abroad, NNI is GNI net of depreciation.
Wages and salaries from abroad are those that are earned by residents who essentially live and consume inside the economic territory but work abroad (this happens in border areas on a regular basis) or for those who live and work abroad for only short periods (seasonal workers) and whose centre of economic interest remains in their home country. Guest-workers and other migrant workers who live abroad for twelve months or more are considered to be resident in the country where they are working. Such people may send part of their earnings to relatives at home, but these remittances are treated as transfers between resident and non-resident households and are recorded in national disposable income but not national income.
Property income from/to abroad includes interest, dividends and all or part of the retained earnings of foreign enterprises owned fully or in part by residents (and vice versa).
In most countries, net receipts of property income account for most of the difference between GDP and GNI. However, it is important to note that retained earnings of foreign enterprises owned by residents do not actually return to the residents concerned. Nevertheless, the retained earnings are recorded as a receipt of property income. A counter entry of the same amount is treated as a financial transaction (a reinvestment of earnings abroad, in shares and other equities) and not as a payment of property income.
Countries with large stocks of outward foreign direct investment may be shown as having large receipts of property income from abroad and therefore high GNI even though much of the property income may never actually be returned to the country but instead added to foreign direct investment. For most OECD countries, GNI per capita does not differ significantly from GDP per capita