A reconsideration of what and who is middle class in South Africa

Abstract

In this paper, we revisit ‘what and who’ is middle class in South Africa using data collected in the 2008 National Income Dynamics Study. First, we consider how to identify the middle class based on two broad definitions adopted in the international economics literature: a middle class defined by the middle share of the national income distribution; and a middle class defined by an absolute level of affluence and lifestyle. We explore alternative ways of capturing the ‘middle income strata’ and we suggest an approach for identifying threshold levels of income associated with middle-class affluence. Second, we show that the size and the composition of the middle class in South Africa are both very sensitive to how the middle class is defined. In particular, we demonstrate that there is very little overlap between the two broad definitions, a finding which reflects very high levels of poverty and inequality in the country.