A Note on the Middle Class in Latin America - Working Paper 303

August 08, 2012

In this paper, Nancy Birdsall sets out basic information on the middle class—identified as people living in households with income per capita between $10 and $50 per day—in eight Latin American countries over the last two decades. There is no consensus among economists on how to identify the middle class. The income-based definition used here is grounded in household surveys and provides a region-wide profile of households that are neither vulnerable to falling into back into poverty nor rich by their national standards.

The Latin American and Caribbean region is becoming middle-class. Thirty percent of the population is middle class (up from 20 percent two decades ago) and its income share has increased from 40 to nearly 50 percent. Is that because of global economic expansion? Will the middle class continue to grow even as overall growth rates slow?

This paper does not address these questions of cause and consequence, but it does provide a basis for optimism that at least in some countries the middle class is large enough to create middle-class societies that are at least consistent with and might reinforce the inclusive politics that sustain broadly shared growth.

Publication: This paper is forthcoming as a chapter in Changyong Rhee, Juzhong Zhuang, and Ravi Kanbur, eds., Inequality in Asia and the Pacific (Manila: Asian Development Bank, 2013).

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