The Role of Middle Class in Economic Development: What Do Cross‐Country Data Show?

21 Pages Posted: 7 Apr 2017

See all articles by Natalie Chun

Natalie Chun

Asian Development Bank

Rana Hasan

Asian Development Bank; University of Maryland - Department of Economics

Muhammad Habibur Rahman

Monash University - Monash University Malaysia

Mehmet Ali Ulubasoglu

Deakin University - School of Accounting, Economics and Finance

Date Written: May 2017

Abstract

This paper investigates the channels through which the middle class may matter for consumption growth. Using several different middle‐class measures and a panel of 105 developing countries spanning the period 1985–2013, we find that a larger middle class influences consumption growth primarily through higher levels of human capital accumulation. There is also a significant direct effect of middle‐class size on consumption growth, which is more pronounced in the latter half of the sample, the 2000–2013 period.

Suggested Citation

Chun, Natalie and Hasan, Rana and Rahman, Muhammad Habibur and Ulubasoglu, Mehmet Ali, The Role of Middle Class in Economic Development: What Do Cross‐Country Data Show? (May 2017). Review of Development Economics, Vol. 21, Issue 2, pp. 404-424, 2017. Available at SSRN: https://ssrn.com/abstract=2947360 or http://dx.doi.org/10.1111/rode.12265

Natalie Chun (Contact Author)

Asian Development Bank ( email )

6 ADB Avenue, Mandaluyong City 1550
Metro Manila
Philippines

Rana Hasan

Asian Development Bank ( email )

6 ADB Avenue, Mandaluyong City 1550
Metro Manila
Philippines

University of Maryland - Department of Economics ( email )

College Park, MD 20742
United States
808-944-7590 (Phone)
808-944-7399 (Fax)

Muhammad Habibur Rahman

Monash University - Monash University Malaysia ( email )

Malaysia

Mehmet Ali Ulubasoglu

Deakin University - School of Accounting, Economics and Finance ( email )

Burwood, Victoria 3215
Australia
+61 3 9244 6592 (Phone)

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