Tag Archives: india

India and the Definition of Middle Class

A newly pro­posed inter­na­tion­al defin­i­tion of the middle class for devel­op­ing coun­tries, pro­duced by the Cen­ter for Glob­al Devel­op­ment for the World Bank, has some sur­pris­ing con­clu­sions for India.

The report, pro­duced by the pres­id­ent of the Cen­ter for Glob­al Devel­op­ment, Nancy Bird­sall, sug­gests that “middle class” is defined as every­one with an income above $10 a day, exclud­ing those in the top 5% of earners in the coun­try… mean­ing India has no middle class.

This is a com­bin­a­tion both of the depth of Indi­a’s poverty and its inequal­ity. China had no middle class in 1990, but by 2005, had a small urb­an middle class (3% of the pop­u­la­tion). South Africa (7%), Rus­sia (30%) and Brazil (19%) all had siz­able middle classes in 2005. […]

In socio-polit­ic­al terms, the middle class is tra­di­tion­ally that seg­ment of soci­ety with a degree of eco­nom­ic secur­ity that allows it to uphold the rule of law, invest and desire sta­bil­ity. They do not, unlike those defined as rich, depend on inher­it­ances or oth­er non-pro­duct­ive sources of income. […]

OECD coun­tries define their poverty lines as 50% of medi­an income which works out […] to about $30 day. In the US the poverty line for a single indi­vidu­al in 2008 was $29 per day and for each indi­vidu­al in a four-per­son house­hold was about $14 per day.

How­ever, people in devel­op­ing coun­tries liv­ing on even $10 a day still have extremely low social indic­at­ors. Eco­nom­ist Lant Pritch­ett has shown that infant mor­tal­ity of house­holds in the richest quin­tile in Bolivia was 32 and Ghana 58 per 1,000. Few­er than 25% of people in the richest quin­tile in India com­plete 9 grades of school, Pritch­ett showed. “An upper lim­it of the 95th per­cent­ile, while on the high side, is just about suf­fi­cient to exclude the coun­trys richest,” Bird­sall adds.

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