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The rise of the middle class and economic growth in ASEAN

Author

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  • Brueckner,Markus
  • Dabla-Norris,Era
  • Gradstein,Mark
  • Lederman,Daniel

Abstract

This paper presents estimates of the relationship between the share of income accruing to the middle class and gross domestic product per capita of economies from the Association of Southeast Asian Nations. The increase in gross domestic product per capita that these economies experienced during 1970?2010 significantly contributed to a higher share of income accruing to the middle class. The impact of the rise of the middle class on economic growth depends on the countries'initial level of gross domestic product per capita. In the majority of these countries, a rise of the middle class that is unrelated to gross domestic product per capita growth would have had a significant negative effect on economic growth, based on the values of the countries'gross domestic product per capita in 1970. In contrast, for recent values of gross domestic product per capita, a rise of the middle class would positively contribute to growth in gross domestic product per capita. The paper shows that human capital accumulation is an important channel through which a rise of the middle class affects economic growth.

Suggested Citation

  • Brueckner,Markus & Dabla-Norris,Era & Gradstein,Mark & Lederman,Daniel, 2017. "The rise of the middle class and economic growth in ASEAN," Policy Research Working Paper Series 8068, The World Bank.
  • Handle: RePEc:wbk:wbrwps:8068
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    References listed on IDEAS

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    Cited by:

    1. Islam, Md. Rabiul & McGillivray, Mark, 2020. "Wealth inequality, governance and economic growth," Economic Modelling, Elsevier, vol. 88(C), pages 1-13.
    2. Anthony Ray Martin, 2019. "The Scope Taxation in Influencing Entrepreneurship: Historical Overview of Tax Policies," Business and Economic Research, Macrothink Institute, vol. 9(1), pages 123-135, March.
    3. Maran Marimuthu & Hanana Khan & Romana Bangash, 2021. "Is the Fiscal Deficit of ASEAN Alarming? Evidence from Fiscal Deficit Consequences and Contribution towards Sustainable Economic Growth," Sustainability, MDPI, vol. 13(18), pages 1-19, September.

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    More about this item

    Keywords

    Development Patterns and Poverty; Equity and Development; Achieving Shared Growth; Pro-Poor Growth;
    All these keywords.

    JEL classification:

    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development

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