The Role of Middle Class in Economic Development: What Do Cross-Country Data Show?

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 N. Chun, R. Hasan,  M.H. Rahman and M. Ulubasoglu, Review of Development Economics, In press.

This paper investigates the channels through which the middle-class may matter for consumption growth. Using several different middle-class measures and a panel of 105 developing countries spanning the period 1985-2013, we find that a larger middle-class influences consumption growth primarily through higher levels of human capital accumulation. There is also a significant direct effect of middle-class size on consumption growth, which is more pronounced in the latter half of the sample, the 2000-2013 period.

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