The Rise of the Middle Class and Economic Growth in ASEAN

26 Pages Posted: 21 May 2017

See all articles by Markus Brueckner

Markus Brueckner

The Australian National University

Era Dabla-Norris

International Monetary Fund (IMF)

Daniel Lederman

World Bank - Latin America and Caribbean Region

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)

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Date Written: May 18, 2017

Abstract

This paper presents estimates of the relationship between the share of income accruing to the middle class and gross domestic product per capita of economies from the Association of Southeast Asian Nations. The increase in gross domestic product per capita that these economies experienced during 1970-2010 significantly contributed to a higher share of income accruing to the middle class. The impact of the rise of the middle class on economic growth depends on the countries' initial level of gross domestic product per capita. In the majority of these countries, a rise of the middle class that is unrelated to gross domestic product per capita growth would have had a significant negative effect on economic growth, based on the values of the countries' gross domestic product per capita in 1970. In contrast, for recent values of gross domestic product per capita, a rise of the middle class would positively contribute to growth in gross domestic product per capita. The paper shows that human capital accumulation is an important channel through which a rise of the middle class affects economic growth.

Keywords: Development Patterns and Poverty, Equity and Development, Achieving Shared Growth, Pro-Poor Growth

Suggested Citation

Brueckner, Markus and Dabla-Norris, Era and Lederman, Daniel and Gradstein, Mark, The Rise of the Middle Class and Economic Growth in ASEAN (May 18, 2017). World Bank Policy Research Working Paper No. 8068. Available at SSRN: https://ssrn.com/abstract=2970846

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

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/

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

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