The Long-Awaited Rise of the Middle Class in Latin America is Finally Happening

40 Pages Posted: 10 Jan 2017

See all articles by Maurizio Bussolo

Maurizio Bussolo

World Bank - Chief Economist Office for Europe and Central Asia

Elie Murard

IZA

Multiple version iconThere are 2 versions of this paper

Date Written: June 1, 2014

Abstract

In many developing countries, the supply of skilled workers is likely to continue to be stronger than demand, and this should drive down the skill premium and reduce inequality. Within the limitations of any exercise based on simulations, this paper finds that the recently observed reduction in inequality in Latin America may continue. Building on counterfactual scenarios projecting economic and demographic (including age and education) growth, the paper also highlights that by 2030 the long-awaited rise of the middle class in Latin America will be in full swing, as its share will be 43 percent of the total population, twice the value in 2005. This achievement is not guaranteed, as countries with large initial inequalities will have to achieve very high rates of inclusive growth. At the same time, a larger middle class is likely to exert a stronger influence on international and domestic policy making.

Keywords: Inequality, Achieving Shared Growth, Economic Theory & Research, Population Policies, Emerging Markets

Suggested Citation

Bussolo, Maurizio and Murard, Elie, The Long-Awaited Rise of the Middle Class in Latin America is Finally Happening (June 1, 2014). World Bank Policy Research Working Paper No. 6912. Available at SSRN: https://ssrn.com/abstract=2895389

Maurizio Bussolo (Contact Author)

World Bank - Chief Economist Office for Europe and Central Asia ( email )

1818 H Street, N.W.
Washington, DC 20433
United States

HOME PAGE: http://https://blogs.worldbank.org/team/maurizio-bussolo

Elie Murard

IZA ( email )

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