Year-end Sale % OFF 
Abstract
Abstract The wave of upbeat stories on the developing world’s emerging middle class has reinvigorated a debate on how social class in general and the middle class in particular ought to be defined and measured. In the economics literature, most scholars agree that being middle class entails being free from poverty, which means being able to afford the basic things in life – not only today, but also tomorrow. In consequence, there is an increasing tendency to define the middle class based on a lack of vulnerability to poverty. In this paper, we strengthen and expand on these existing approaches in three ways: First, we incorporate the differentiation between the middle class and a (non-poor) vulnerable group into a broader social-stratification schema that additionally differentiates between transient and chronic poverty. Second, in estimating the risk of poverty, we employ a multivariate regression model that explicitly allows for possible feedback effects from past poverty experiences and accounts for the potential endogeneity of initial conditions, unobserved heterogeneity, and non-random panel attrition – four factors insufficiently addressed in existing studies. Third, we highlight the value of paying attention to these conceptual and modelling issues by showing that class divisions based on monetary thresholds inadequately capture a household’s chances of upward and downward mobility. We then apply our conceptual framework to the South African case. We find that only one in four South Africans can be considered stably middle class or elite. Access to stable labor market income is a key determinant of achieving economic stability. A lack of jobs as well as the prevalence of precarious forms of work drive high levels of vulnerability, which in turn constrains the development of an emergent middle class – not only in South Africa but potentially also in other parts of the developing world that face similar labor market challenges.
Highlights
What defines the middle class? While countless interpretations appear to exist, most definitions of what constitutes the middle class relate in some way to the degree of economic security and self-sufficiency that people experience
This paper has shown how existing empirical strategies used to identify the middle class based on a vulnerability criterion can be usefully extended and operationalized in the analysis of patterns of structured inequality
We propose a multilayered schema of social stratification that explicitly takes both the risk of falling into poverty and the chances ofescaping from poverty into consideration
Summary
What defines the middle class? While countless interpretations appear to exist, most definitions of what constitutes the middle class relate in some way to the degree of economic security and self-sufficiency that people experience. They cite the opportunities they are given to move ahead in life, which some people never get, and the financial cushion that allows them to take risks and cope with adverse shocks In spite of this notion, more than a few studies in the economics literature locate the middle class just above the poverty line (for an extensive review of different approaches, see Zizzamia, Schotte, Leibbrandt, & Ranchhod, 2016). These studies, fail to acknowledge that being able to afford a certain basket of goods at a given point in time provides an insufficient indication of whether the same will be true in the near future, and that some of those who are currently non-poor may face a non-negligible risk of falling into poverty.
Sign-in/Register to view highlights & summary Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
