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

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 pape...

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Bibliographic Details
Main Authors:	Bussolo, Maurizio, Maliszewska, Maryla, Murard, Elie
Format:	Policy Research Working Paper
Language:	English en_US
Published:	World Bank, Washington, DC 2014
Subjects:	ABSOLUTE DIFFERENCE ABSOLUTE TERMS ABSOLUTE VALUE AGGREGATE GROWTH AGRICULTURAL OUTPUT AGRICULTURAL SECTOR AGRICULTURE ANNUAL % CHANGE ANNUAL GROWTH ANNUAL GROWTH RATE ANNUAL RATE AVERAGE ANNUAL AVERAGE GROWTH AVERAGE INCOME AVERAGE INCOMES BASE YEAR BASKET OF GOODS CAPITAL ACCUMULATION CITIZENS COMPARATIVE ADVANTAGE CONSTANT PRICES CONSUMERS COUNTRY INEQUALITY COUNTRY LEVEL DECLINING INEQUALITY DEMAND FOR SERVICES DEMOGRAPHIC CHANGES DEMOGRAPHIC FACTORS DEMOGRAPHIC GROWTH DEMOGRAPHIC PROJECTIONS DEPENDENCY RATIO DEPENDENCY RATIOS DEVELOPED COUNTRIES DEVELOPED WORLD DEVELOPING COUNTRIES DEVELOPING COUNTRY DEVELOPING REGIONS DEVELOPING WORLD DEVELOPMENT GOALS DEVELOPMENT POLICY DISTRIBUTIONAL CHANGES DISTRIBUTIONAL EFFECT DISTRIBUTIONAL EFFECTS EARNINGS INEQUALITY ECONOMETRIC MODELS ECONOMIC ACTIVITY ECONOMIC CHANGES ECONOMIC EXPANSION ECONOMIC GROWTH ECONOMIC MODELS ECONOMIC PERFORMANCE ECONOMIC POLICIES ECONOMIC RESEARCH ECONOMIC REVIEW ECONOMIC THEORY ECONOMIC TRENDS ECONOMICS EDUCATED WORKERS EDUCATION LEVEL EDUCATION SYSTEMS EDUCATIONAL ATTAINMENT ELDERLY EMPIRICAL ANALYSIS EMPIRICAL STUDIES EQUAL DISTRIBUTION EQUALIZING EFFECT EXCHANGE RATE EXCHANGE RATES FACTOR PRICES FERTILITY FORECASTS FOSSIL FUELS FUTURE GROWTH GDP GDP PER CAPITA GENERAL EQUILIBRIUM MODEL GINI COEFFICIENT GLOBAL DEVELOPMENT GLOBAL ECONOMY GLOBAL LEVEL GROWTH MODEL GROWTH MODELS GROWTH PATTERN GROWTH PROJECTIONS GROWTH RATE GROWTH RATES HIGH GROWTH HIGH INCOME COUNTRIES HIGH URBANIZATION HOUSEHOLD INCOME HOUSEHOLD LEVEL HOUSEHOLD SURVEYS HOUSEHOLD WELFARE HUMAN CAPITAL INCOME INCOME DATA INCOME DISTRIBUTION INCOME DISTRIBUTIONS INCOME ELASTICITY INCOME ELASTICITY OF DEMAND INCOME GROWTH INCOME GROWTH RATE INCOME INEQUALITY INCOME LEVEL INCOME LEVELS INCOME SCALE INCOME STUDY INCOMES INCREASE INCOME INEQUALITY INCREASING INEQUALITY INEQUALITY INEQUALITY CHANGES INEQUALITY DECREASE INEQUALITY LEVELS INEQUALITY TRENDS INEQUALITY WILL INTERNAL MIGRATION LABOR FORCE LABOR MARKET LABOR SUPPLY LIVING STANDARDS LONG RUN MACROECONOMIC OUTCOMES MEAN INCOME MEASUREMENT ERRORS MEDIAN INCOME MICRO MODEL MIDDLE CLASS MIDDLE CLASS SOCIETY MIDDLE INCOME COUNTRIES MIGRATION MILLENNIUM DEVELOPMENT GOALS MINIMUM LEVEL MORTALITY MORTALITY RATES NATIONAL INCOME NATIONALS NATURAL RESOURCES NEGATIVE RELATIONSHIP NUMBER OF HOUSEHOLDS NUMBER OF PEOPLE NUMBER OF PERSONS NUMBER OF WORKERS OLD-AGE OLDER PEOPLE OPEN SOCIETY PER CAPITA GROWTH PER CAPITA INCOME PER CAPITA INCOMES POLICY CHANGES POLICY DISCUSSIONS POLICY GOALS POLICY MAKING POLICY RESEARCH POLICY RESEARCH WORKING PAPER POOR COUNTRIES POPULATION GROWTH POPULATION INCREASES POPULATION PROJECTIONS POPULATION SHARE POPULATION SUBGROUPS POSITIVE EFFECTS POVERTY REDUCTION POWER PARITY PRIMARY EDUCATION PRODUCTIVE ASSETS PRODUCTIVITY PRODUCTIVITY GROWTH PROGRESS PROPORTIONAL CHANGE PUBLIC SERVICES PURCHASING POWER PURCHASING POWER PARITY REAL EXCHANGE RATES REAL GDP REAL INCOME REDUCING INEQUALITY REGIONAL DIFFERENCES REGIONAL LEVEL REGIONAL POPULATION RELATIVE INCOME RELATIVE INCOMES RELATIVE PRICES RELATIVE SHIFT RELATIVE WAGE RELATIVE WAGES RESPECT RICH COUNTRIES RISING DEMAND RURAL AREAS RURAL POPULATION SECONDARY EDUCATION SECONDARY SCHOOL SECONDARY SCHOOL EDUCATION SECTORAL COMPOSITION SIGNIFICANT DIFFERENCES SKILL LEVEL SKILL PREMIUM SKILLED WAGE SKILLED WAGES SKILLED WORKERS STANDARD DEVIATION STRUCTURAL CHANGE TERTIARY EDUCATION TERTIARY LEVEL TOTAL OUTPUT UNSKILLED LABOR URBAN AREAS URBAN MIGRATION URBAN WORKERS WOMAN WORLD INCOME DISTRIBUTION WORLD POPULATION WORLD TRADE ORGANIZATION YOUNG MEN
Online Access:	http://documents.worldbank.org/curated/en/2014/06/19642977/long-awaited-rise-middle-class-latin-america-finally-happening http://hdl.handle.net/10986/18767

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Summary:	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.

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

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