Columbia International Affairs Online: Working Papers

CIAO DATE: 09/2012

A Note on the Middle Class in Latin America

Nancy Birdsall

August 2012

Center for Global Development


This paper sets out basic information on the middle class in eight Latin American countries over the last two decades. The middle class is identified as people living in households with income per capita between $10 and $50 per day, adjusted for purchasing power parity. This income-based definition is conceptually and empirically grounded in the analysis of household surveys and is used to provide a region-wide profile of households that are neither vulnerable to falling into back into poverty, nor rich by their national standards. In the countries studied (between about 1990 and 2010), the population share of the middle class increased from 20 to 30 percent, and its income share increased from 40 to nearly 50 percent. The typical middle class household in Latin America has at least some secondary education and sends all its kids to school; its adults are likely to be employees in urban, organized or public sectors of the economy. Though rich in relative terms (mostly in the top quintile of their national income distributions), their social characteristics are much closer to the poor than to the rich. When controlling for household income, I find that middle class households are not particularly different from other income-based classes. I finally hypothesize about potential causes and consequences of the larger Latin American middle class.