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The rise of the middle class and economic growth in ASEAN

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

Abstract

We present estimates of the relationship between the share of income accruing to the middle class and GDP per capita of ASEAN economies. The increase in GDP per capita that ASEAN economies experienced during 1970-2010 significantly contributed to a higher share of income accruing to the middle class in these countries. The impact of a rise of the middle class on economic growth depends on ASEAN countries’ initial level of GDP per capita. In the majority of ASEAN countries, a rise of the middle class that is unrelated to GDP per capita growth would have had a significant negative effect on economic growth based on values of these countries’ GDP per capita in 1970. In contrast, for recent values of GDP per capita a rise of the middle class would positively contribute to GDP per capita growth. We show that human capital accumulation is an important channel through which a rise of the middle class affects economic growth.

Suggested Citation

  • Markus Brueckner & Era Dabla-Norris & Mark Gradstein & Daniel Lederman, 2017. "The rise of the middle class and economic growth in ASEAN," CAMA Working Papers 2017-10, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
    • Handle: RePEc:een:camaaa:2017-10
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    Cited by:

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    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

    Income Inequality; Economic Growth; ASEAN;
    All these keywords.

    JEL classification:

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

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