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Why We Should Pay Attention to the Middle Class

Author

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  • Martin Joseph M. Raymundo
  • Raymond E. Gaspar
  • Jose Ramon Alber

Abstract

The middle class plays a critical role in the development of a country. It is not only expected to create employment as business start-ups but also to boost investment and production as consumers. This Policy Note describes the middle class and provides its contributions to economic growth. It adopts an alternative definition by dividing the income distribution based on official poverty lines. To maximize the role of the middle class in growth and development, it is important to make the middle class a stable force to sustain the growth of the Philippine economy. To do so, the government should find more avenues to attract investments that will create more and better-quality jobs. The corporate social responsibilities of major companies could be tapped to generate more and better-quality jobs for the middle class. The income tax reform being proposed in the legislative branch will likely bolster the income share of the middle class. This income boost will provide an opportunity to capitalize on domestic demand-led growth spurred by domestic consumption.

Suggested Citation

  • Martin Joseph M. Raymundo & Raymond E. Gaspar & Jose Ramon Alber, 2015. "Why We Should Pay Attention to the Middle Class," Working Papers id:7590, eSocialSciences.
    • Handle: RePEc:ess:wpaper:id:7590
    Note: Institutional Papers
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    File URL: http://www.esocialsciences.org/Download/repecDownload.aspx?fname=A2015107113151_35.pdf&fcategory=Articles&AId=7590&fref=repec
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    References listed on IDEAS

    as
    1. Era Dabla-Norris & Kalpana Kochhar & Nujin Suphaphiphat & Franto Ricka & Evridiki Tsounta, 2015. "Causes and Consequences of Income Inequality; A Global Perspective," IMF Staff Discussion Notes 15/13, International Monetary Fund.
    2. Ms. Era Dabla-Norris & Ms. Kalpana Kochhar & Mrs. Nujin Suphaphiphat & Mr. Franto Ricka & Ms. Evridiki Tsounta, 2015. "Causes and Consequences of Income Inequality: A Global Perspective," IMF Staff Discussion Notes 2015/013, International Monetary Fund.
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    1. repec:phd:dpaper:dp_2015-55_(revised is not listed on IDEAS
    2. repec:phd:rpseri:dp_2015-55 is not listed on IDEAS
    3. World Bank, 2016. "Philippine Economic Update, October 2016," World Bank Publications - Reports 25271, The World Bank Group.

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