The Role of the Middle Class in Economic Development: What Do Cross-Country Data Show?

Natalie Chun (), Rana Hasan () and Mehmet Ulubasoglu
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Natalie Chun: Asian Development Bank
Rana Hasan: Asian Development Bank

No 245, ADB Economics Working Paper Series from Asian Development Bank

Abstract: This paper investigates the channels through which the middle class may matter for consumption growth and development, as well as the determinants of size and growth of the middle class. Using different middle class measures and a panel of 72 developing countries spanning the period 1985–2006, the authors find that a larger middle class influences growth primarily through higher levels of human capital investment. While institutional and cultural characteristics may present barriers to fostering the middle class, enlarging governments, developing urban areas, promoting democracy, and limiting ethnic concentration are all potentially conducive to boosting the size of the middle class.

Keywords: consumption growth; development; human capital investment; middle class; urbanization (search for similar items in EconPapers)
JEL-codes: D31 E21 O15 (search for similar items in EconPapers)
Pages: 48 pages
Date: 2011-01-01
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Related works:
Journal Article: The Role of Middle Class in Economic Development: What Do Cross-Country Data Show? (2017)
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