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

Bussolo, Maurizio; Maliszewska, Maryla; Murard, Elie

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

2014

Bussolo, Maurizio | Maliszewska, Maryla | Murard, Elie

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.

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AGROVOC Keywords

agricultural sector agriculture consumers dependency ratio developed countries developing countries econometric models economic growth economic policies economic trends economics education systems elderly exchange rate fertility fossil fuels growth models growth rate household income household surveys human capital income income distribution living standards migration millennium development goals mortality national income natural resources older people population growth poverty reduction primary education productivity public services rural areas rural population secondary education structural change urban areas world trade organization

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Publisher

World Bank, Washington, DC

Other Subjects

High growth; Population increases; Minimum level; Growth model; Policy making; Declining inequality; Middle class society; Citizens; Rising demand; Urban workers; Developing world; Demographic changes; Inequality; Average annual; Household level; Income study; Policy research; Skilled workers; Absolute difference; Policy goals; Regional population; Demographic growth; Gdp; Population share; Productive assets; Factor prices; Number of persons; Progress; Country level; Number of workers; Base year; Skilled wages; Income levels; Old-age; Real exchange rates; Economic research; Equalizing effect; Labor force; Labor market; Development goals; Average income; Micro model; Exchange rates; Tertiary education; Absolute value; Economic models; Relative prices; Rich countries; Gini coefficient; Aggregate growth; Equal distribution; Labor supply; Middle class; Distributional changes; Education level; Economic expansion; Annual % change; Economic activity; Long run; Educational attainment; Income scale; Economic theory; Proportional change; Median income; High urbanization; Developed world; Income elasticity; Inequality decrease; Economic changes; Income level; General equilibrium model; Empirical studies; Unskilled labor; Relative income; Positive effects; Annual growth; Economic performance; Increase income inequality; Development policy; Basket of goods; Skill level; Growth pattern; Annual growth rate; Income distributions; Sectoral composition; Household welfare; Measurement errors; Real gdp; Per capita incomes; Tertiary level; Distributional effects; Population subgroups; Demographic projections; Dependency ratios; Income elasticity of demand; Number of people; Internal migration; Agricultural output; Future growth; Reducing inequality; Skilled wage; Policy discussions; World income distribution; Distributional effect; Absolute terms; Real income; Comparative advantage; Income inequality; Relative wage; Woman; Demand for services; Policy changes; Productivity growth; Income growth; Per capita growth; Respect; Economic review; Developing country; Power parity; Relative shift; Annual rate; Standard deviation; Forecasts; Inequality changes; Policy research working paper; Gdp per capita; Educated workers; Global economy; High income countries; Total output; Incomes; Income growth rate; Poor countries; Purchasing power; Constant prices; Country inequality; Capital accumulation; Inequality will; Demographic factors; Purchasing power parity; Secondary school education; Significant differences; Relative incomes; Population projections; Urban migration; Income data; Earnings inequality; Empirical analysis; Number of households; Growth projections; Regional level; Global level; World population; Relative wages; Global development; Developing regions; Increasing inequality; Growth rates; Secondary school; Inequality trends; Mean income; Open society; Young men; Per capita income; Average incomes; Skill premium; Average growth; Mortality rates; Regional differences; Nationals; Negative relationship; Macroeconomic outcomes; Middle income countries; Inequality levels

License

Policy Research Working Paper;No. 6912http://creativecommons.org/licenses/by/3.0/igo/CC BY 3.0 IGO

Source

Policy Research Working Paper;No. 6912

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

2014

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