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

Author

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  • Bussolo, Maurizio

    () (World Bank)

  • Maliszewska, Maryla

    (World Bank)

  • Murard, Elie

    () (IZA)

Abstract

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 region's 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.

Suggested Citation

  • Bussolo, Maurizio & Maliszewska, Maryla & Murard, Elie, 2017. "The Long-Awaited Rise of the Middle Class in Latin America Is Finally Happening," IZA Discussion Papers 10804, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp10804
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    References listed on IDEAS

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    1. Francois Bourguignon & Luiz A. Pereira da Silva, 2003. "The Impact of Economic Policies on Poverty and Income Distribution : Evaluation Techniques and Tools," World Bank Publications, The World Bank, number 15090, January.
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    3. Maurizio Bussolo & Rafael E De Hoyos & Denis Medvedev, 2010. "Economic growth and income distribution: linking macro-economic models with household survey data at the global level," International Journal of Microsimulation, International Microsimulation Association, vol. 3(1), pages 92-103.
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    More about this item

    Keywords

    Latin America; skill premium; middle class; inequality;

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts

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