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What is Middle Class?

What is Middle Class?

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Published by Andy Sumner

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Published by: Andy Sumner on May 06, 2011
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What is ‘middle class’?Draft note
Andy Sumner a.sumner@ids.ac.uk Comparison of definitions of the ‘middle classes’
AuthorDefinition type and detailsCharacteristicsSize
AfDB (2011)Definition in absolute terms for a‘Developing world middle class’$2-$4/day and $2-$20313m or one in three (34%) of Africans.$2-$4 = 150m-180m$4-$20/day = 120m-150mUp from around 111m (26%) in 1980and 196m (27%) in 2000Banerjee andDuflo (2008)Definition in absolute terms for a‘Developing world middle class’‘households whose daily per capitaexpenditures valued at PPP are between $2 and $4 or between $6and $10’ (page 2)Spend more on higher quality food,entertainment and living conditions.(p3)More likely to be in salariedemployment (p10)Likely to invest in children’seducation, healthcare and durablegoods (p13-16)Have smaller families (p13)Better access to credit but stilllimited financing for business (p9)Likely to operate businesses at lowor negligible profits (p10)n/a
Birdsall(2010)Absolute, global threshold‘people at or above the equivalent of $10 a day in 2005, and at or belowthe 95
percentile of incomedistribution in their own country’(p4)Likely to have more than 10 years of education (p12 and p25)Smaller household sizes (p13, p26)More likely to be salaried workers(p13, p27)Three countries (Ghana, India andIndonesia) have no populationdefined as ‘middle class’ (p28)n/aGoldmanSachs (2008)Absolute definition of a ‘worldmiddle class’Those earning between $6000(World Bank’s current definition of ‘upper middle income countries’ inwhich discretionary spending levels pick up sharply) and $30,000 in PPPterms (corresponding to the medianincome levels in OECD countries)(p3)Middle income includes bothcountries and peopleThe fastest growing segment of the population is likely to shift fromthose earning between $3,000 and$6,000 and those earning between$9,000 and $12,000. No estimations given – an estimated2 billion people could join this group by 2030 (p5)McKinsey(2010)Global middle class defined inabsolute termsAnnual household income of  between $13,500 and $113,000(PPP) No estimations given on a globalscale.Indian middle class estimated at 50m people (Farrell and Beinhocker,2007)Ravallion(2009)Definition in absolute terms for a‘developing world’s middle class’‘those who are not deemed “poor” bythe standards of developing countries but are still poor by the standards of Two types of developing countries:one with large middle class and onewith a small one (p11)Large proportion of the developingworld middle class is ‘bunched’around the $2 to $3 a day mark (p10-2005: 2.6bn representing 48.5% of the total population (p27)
rich countries’…‘for the lower bound, the median poverty line in 70 developing country poverty lines ($2)’…and ‘as an upper  bound, the US poverty line of $13 per day’ (p4)14)Kharas (2010)Global middle class, which is definedin absolute terms‘those households with dailyexpenditures between $10 and $100 per person in PPP terms. This‘excludes those who are considered poor in the poorest advancedcountries and those who areconsidered rich in the richestadvanced country’ (p12)High income elasticity for durablegoods and services (p15)2009: 1.8bn of which: N. America: 338mEurope: 664mCentral and S. America: 181mAsia pacific: 525mSub-Saharan Africa: 32mMiddle East and North Africa: 105m(p15-16)Chun (2010)Defined in absolute terms to allowfor cross-country comparisons (p2)Those earning between US$2 and$20 per day (2005 PPP terms) (p2)57% of the Asian population ismiddle class based on householdsurveys (p9)Wheary(2010)Defined in absolute terms withacknowledgement of regionalvariation:‘The definition of what it means to be “middle class” shifts from place to place, from economy to economy”(p76)‘Individuals earning between $12High expectations for civil rights andfair judicial systemsRecognition of government’s dutiesto invest wiselyChina: 800mIndia: 264mGrowth since 1990 of 1.2bn since theearly 1990sProjection that by 2020, ‘more thanhalf of the world’s population will belong to the middle class’

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