Who are the Middle Class and What Values do They Hold? Evidence from the World Values Survey

Abstract

This paper examines key determinants of class status and the relationship between class status and values. We show that class status is largely determined by factors related to higher incomes, but is highly divergent among regions. Higher class status is significantly correlated with values that are more likely to foster economic growth. However, political activism is to a greater degree driven by the middle class rather than the upper class or the lower class. This indicates that the middle class may have special importance in demanding greater political accountability. Thus, policies that raise class status through education and better jobs may be highly important to creating a society with values that can contribute to higher economic growth. However, higher income may have to be assessed against the need to have a larger and more politically vocal and active middle class that can place checks on government behavior. In general, the large variation across regions in values indicates that the social and cultural make-up of a country may factor into whether a country has more values that are more conducive to economic growth. This may indicate that there are deeper and more complex issues that cannot simply be resolved by policies that attempt to increase income and move people up in class status.

Keywords: governance, institutional quality, economic growth, inequality, governance indicators, measurement of governance, governance surplus, governance deficit

JEL Classification: D03