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The rise of the middle class in Ecuador during the oil boom


  • Diego F. Grijalva



In this paper we analyse the evolution of the middle class in Ecuador during the commodities boom (2005-2015). Using the definition of middle class proposed by López-Calva and Ortiz-Juárez (2014), we document an impressive rise of the middle class, which doubled in this period and peaked at 37.4% of the population in 2015. We show that both economic growth and inequality reduction have played an important role in this social change, although growth is responsible for over threequarters thereof. Based on an analysis of the macroeconomic and labour conditions associated with the evolution of the middle class, we argue that the recent slowdown in growth and in inequality reduction following the end of the commodities boom poses a risk for the size of the middle class, which represents a serious challenge for policy makers. En este artículo analizamos la evolución de la clase media en Ecuador durante el boom de los commodities (2005-2015). Utilizando la definición de clase media propuesta por López-Calva y Ortiz-Juárez (2014) documentamos el gran crecimiento de la clase media, la cual se ha duplicado durante este periodo llegando a un pico de 37,4% de la población en 2015. Mostramos que tanto el crecimiento económico como la reducción de la desigualdad han cumplido un papel importante en esta dinámica, si bien el crecimiento es responsable de más de 3/4 del incremento de la clase media. Basándonos en un análisis de las condiciones macroeconómicas y del mercado laboral, argumentamos que la ralentización del crecimiento y de la reducción de la desigualdad ocurridas luego del final del boom de los commodities presenta un riesgo para el tamaño de la clase media, lo que constituye un serio reto para los hacedores de política.

Suggested Citation

  • Diego F. Grijalva, 2017. "The rise of the middle class in Ecuador during the oil boom," REVISTA CUADERNOS DE ECONOMÍA, UNIVERSIDAD NACIONAL DE COLOMBIA -FCE - CID, vol. 36(72), October.
  • Handle: RePEc:col:000093:015847

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    References listed on IDEAS

    1. Lustig, Nora & Lopez-Calva, Luis F. & Ortiz-Juarez, Eduardo, 2013. "Declining Inequality in Latin America in the 2000s: The Cases of Argentina, Brazil, and Mexico," World Development, Elsevier, vol. 44(C), pages 129-141.
    2. Daniel Halter & Manuel Oechslin & Josef Zweimüller, 2014. "Inequality and growth: the neglected time dimension," Journal of Economic Growth, Springer, vol. 19(1), pages 81-104, March.
    3. repec:bla:rdevec:v:21:y:2017:i:2:p:404-424 is not listed on IDEAS
    4. Era Dabla-Norris & Kalpana Kochhar & Nujin Suphaphiphat & Frantisek Ricka & Evridiki Tsounta, 2015. "Causes and Consequences of Income Inequality; A Global Perspective," IMF Staff Discussion Notes 15/13, International Monetary Fund.
    5. Murphy, Kevin M & Shleifer, Andrei & Vishny, Robert W, 1989. "Industrialization and the Big Push," Journal of Political Economy, University of Chicago Press, vol. 97(5), pages 1003-1026, October.
    6. Matthias Doepke & Fabrizio Zilibotti, 2008. "Occupational Choice and the Spirit of Capitalism," The Quarterly Journal of Economics, Oxford University Press, vol. 123(2), pages 747-793.
    7. Ravallion, Martin, 2010. "The Developing World's Bulging (but Vulnerable) Middle Class," World Development, Elsevier, vol. 38(4), pages 445-454, April.
    8. Dierk Herzer & Sebastian Vollmer, 2012. "Inequality and growth: evidence from panel cointegration," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 10(4), pages 489-503, December.
    9. repec:ejw:journl:v:15:y:2018:i:1:p:105-128 is not listed on IDEAS
    10. Halter, David & Oechslin, Manuel, 2010. "Inequality and Growth: The Neglected Time Dimension," CEPR Discussion Papers 8033, C.E.P.R. Discussion Papers.
    11. Francisco H.G. Ferreira & Julian Messina & Jamele Rigolini & Luis-Felipe López-Calva & Maria Ana Lugo & Renos Vakis, 2013. "Economic Mobility and the Rise of the Latin American Middle Class
      [La movilidad económica y el crecimiento de la clase media en América Latina]
      ," World Bank Publications, The World Bank, number 11858, December.
    12. Iván Gachet & Diego F. Grijalva & Paúl Ponce & Damián Rodríguez, 2016. "Vertical and horizontal inequality in Ecuador: The lack of sustainability," WIDER Working Paper Series 106, World Institute for Development Economic Research (UNU-WIDER).
    13. Easterly, William, 2001. "The Middle Class Consensus and Economic Development," Journal of Economic Growth, Springer, vol. 6(4), pages 317-335, December.
    14. Matthias Doepke & Fabrizio Zilibotti, 2005. "Social Class and the Spirit of Capitalism," Journal of the European Economic Association, MIT Press, vol. 3(2-3), pages 516-524, 04/05.
    15. Nancy Birdsall, 2015. "Does the Rise of the Middle Class Lock in Good Government in the Developing World?," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 27(2), pages 217-229, April.
    16. Nancy Birdsall, 2015. "Does the Rise of Middle Class Lock in Good Government in the Developing World?," Working Papers id:7861, eSocialSciences.
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    Cited by:

    1. Chokaev, Bekhan (Чокаев, Бекхан), 2017. "Islamic Finance: Possibilities for Russian Economy
      [Исламские Финансы: Возможности Для Российской Экономики]
      ," Working Papers 031719, Russian Presidential Academy of National Economy and Public Administration.
    2. Pavel Trunin & Marina Kamenskikh & Margarita Muftiahetdinova, 2009. "Islamic Banking System: Present State and Prospects for Development," Research Paper Series, Gaidar Institute for Economic Policy, issue 122P.

    More about this item


    Ecuador; middle class; inequality; commodities boom.;

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development


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