Middle Class in Africa: Determinants and Consequences

International Economic Journal , 30(4), pp. 527-549 (December, 2016).

31 Pages Posted: 15 Dec 2014 Last revised: 6 Dec 2016

See all articles by Oasis Kodila-Tedika

Oasis Kodila-Tedika

University of Kinshasa - Department of Economics

Simplice Asongu

African Governance and Development Institute

Julio Kayembe

Independent

Date Written: December 15, 2014

Abstract

This study complements the inclusive growth literature by examining the determinants and consequences of the middle class in a continent where economic growth has been relatively high. The empirical evidence is based on a sample of 33 African countries for a 2010 cross-sectional study. OLS, 2SLS, 3SLS and SUR estimation techniques are employed to regress a plethora of middle class indicators, notably, the: floating, middle-class with floating, middle-class without floating, lower-middle-income and upper-middle-income categories. Results can be classified into two main strands. First, results on determinants broadly show that GDP per capita and education positively affect all middle class dependent variables. However, we have seen a negative nexus for the effect of ethnic fragmentation, political stability in general and partially for economic vulnerability. Simple positive correlations have been observed for: the size of the informal sector, openness and democracy. Second, on the consequences, the middle class enables the accumulation of human and infrastructural capital, while its effect is null on political stability and democracy in the short-run but positive for governance and modernisation. Policy implications are discussed.

Keywords: Poverty; Inequality; Middle class; Africa

JEL Classification: D31; O1, O4, O55, I32

Suggested Citation

Kodila-Tedika, Oasis and Asongu, Simplice and Kayembe, Julio, Middle Class in Africa: Determinants and Consequences (December 15, 2014). International Economic Journal , 30(4), pp. 527-549 (December, 2016). . Available at SSRN: https://ssrn.com/abstract=2538305 or http://dx.doi.org/10.2139/ssrn.2538305

Oasis Kodila-Tedika (Contact Author)

University of Kinshasa - Department of Economics ( email )

Kinshasa
Democratic Republic of the Congo

Simplice Asongu

African Governance and Development Institute ( email )

P.O. Box 8413
Yaoundé, 8413
Cameroon

Julio Kayembe

Independent

No Address Available
United States

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