Understanding the Growth of the Middle Class in Bolivia

Javier Beverinotti, Gustavo Canavire-Bacarreza and Alejandro Puerta-Cuartas

No 11403, IDB Publications (Working Papers) from Inter-American Development Bank

Abstract: In this paper we aim to disentangle how sectoral economic growth affects the growth of the middle class size using state-level data of Bolivia from 2000 to 2017, a country with limited data, breaking the three main economic activities into subsectors aiming for more specific results. By means of a Bayesian hierarchical longitudinal model for small samples, we find that the commerce and services sectors have the biggest impact, even though mining and agriculture also have a positive effect on the increase of the middle class in Bolivia. Our results also suggest that both formality and public social investment have a significant, yet smaller, effect.

Keywords: economic growth; Informality; middle class (search for similar items in EconPapers)
JEL-codes: C23 D63 I32 O41 (search for similar items in EconPapers)
Date: 2021-07
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Persistent link: https://EconPapers.repec.org/RePEc:idb:brikps:11403

DOI: 10.18235/0003407

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