Middle class in Africa: Determinants and Consequences

Oasis Kodila-Tedika, Simplice Asongu and Julio Kayembe
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Julio Kayembe: Economiste, Rawbank

No 14/026, Research Africa Network Working Papers from Research Africa Network (RAN)

Abstract: This study complements the inclusive growth literature by examining the determinants and consequences of the middle class in a continent where economic growth has been relatively high. The empirical evidence is based on a sample of 33 African countries for a 2010 cross-sectional study. OLS, 2SLS, 3SLS and SUR estimation techniques are employed to regress a plethora of middle class indicators, notably, the: floating, middle-class with floating, middle-class without floating, lower-middle-income and upper-middle-income categories. Results can be classified into two main strands. First, results on determinants broadly show that GDP per capita and education positively affect all middle class dependent variables. However, we have seen a negative nexus for the effect of ethnic fragmentation, political stability in general and partially for economic vulnerability. Simple positive correlations have been observed for: the size of the informal sector, openness and democracy. Second, on the consequences, the middle class enables the accumulation of human and infrastructural capital, while its effect is null on political stability and democracy in the short-run but positive for governance and modernisation. Policy implications are discussed.

Keywords: Poverty; Inequality; Middle class; Africa (search for similar items in EconPapers)
JEL-codes: D31 I32 O1 O4 O55 (search for similar items in EconPapers)
Pages: 31
Date: 2014-12
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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http://publications.resanet.org/RePEc/abh/abh-wpap ... and-Consequences.pdf Revised version, 2014 (application/pdf)

Related works:
Journal Article: Middle Class in Africa: Determinants and Consequences (2016)
Working Paper: Middle class in Africa: Determinants and Consequences (2014)
Working Paper: Middle class in Africa: Determinants and Consequences (2014)
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