In this presentation, which summarizes work from a forthcoming working paper, Nancy Birdsall, Nora Lustig, and Christian Meyer identify a group of people in Latin America, and for comparison in selected other emerging market economies in the developing world, who are not poor but not middle class either. Using household survey data, the authors define as “strugglers” people living in households in which income per person falls between $4 and $10 per capita per day (at constant 2005 PPP dollar) – well above the international poverty line, but below what we would call the secure middle class.
The authors present evidence on the relationship of the strugglers to the state in countries of Latin America, using estimates of the taxes they pay and the benefits they receive from the state including cash transfers and access to social insurance and health, education, and other public services. Finally, they discuss potential challenges and risks for the social contract in countries of the region, particularly emphasizing the risk of marginalization for the strugglers.
