The Rise of the Middle Class and Economic Growth in ASEAN

26 Pages Posted: 6 Feb 2017

See all articles by Markus Brueckner

Markus Brueckner

The Australian National University

Era Dabla-Norris

International Monetary Fund (IMF)

Mark Gradstein

Ben-Gurion University of the Negev - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute); Centre for Economic Policy Research (CEPR); World Bank - Development Research Group (DECRG)

Daniel Lederman

World Bank - Latin America and Caribbean Region

Multiple version iconThere are 2 versions of this paper

Date Written: January 2017

Abstract

We present estimates of the relationship between the share of income accruing to the middle class and GDP per capita of ASEAN economies. The increase in GDP per capita that ASEAN economies experienced during 1970-2010 significantly contributed to a higher share of income accruing to the middle class in these countries. The impact of a rise of the middle class on economic growth depends on ASEAN countries’ initial level of GDP per capita. In the majority of ASEAN countries, a rise of the middle class that is unrelated to GDP per capita growth would have had a significant negative effect on economic growth based on values of these countries’ GDP per capita in 1970. In contrast, for recent values of GDP per capita a rise of the middle class would positively contribute to GDP per capita growth. We show that human capital accumulation is an important channel through which a rise of the middle class affects economic growth.

Keywords: Income Inequality, Economic Growth, ASEAN

JEL Classification: O1

Suggested Citation

Brueckner, Markus and Dabla-Norris, Era and Gradstein, Mark and Lederman, Daniel, The Rise of the Middle Class and Economic Growth in ASEAN (January 2017). CAMA Working Paper No. 10/2017 . Available at SSRN: https://ssrn.com/abstract=2912003 or http://dx.doi.org/10.2139/ssrn.2912003

Markus Brueckner (Contact Author)

The Australian National University ( email )

Canberra, Australian Capital Territory 2601
Australia

Era Dabla-Norris

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

Mark Gradstein

Ben-Gurion University of the Negev - Department of Economics ( email )

Beer-Sheva 84105
Israel
+97 2 8647 2288 (Phone)
+97 2 8647 2941 (Fax)

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

HOME PAGE: http://www.cesifo.de

Centre for Economic Policy Research (CEPR)

London
United Kingdom

World Bank - Development Research Group (DECRG)

1818 H. Street, N.W.
MSN3-311
Washington, DC 20433
United States

Daniel Lederman

World Bank - Latin America and Caribbean Region ( email )

1818 H Street NW
Washington, DC 20433
United States

HOME PAGE: http://sites.google.com/site/danielledermanworldbank/

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