Who Is the Latin American Middle Class? Relative-Income and Multidimensional Approaches

Abstract

Economic progress in Latin America over the last decade has been undeniable: solid growth rates, macroeconomic stability and fiscal discipline were detained only temporarily by the international financial crisis that began in 2008.¹ The region has made significant progress in its poverty reduction strategy, with poverty rates decreasing from 48 per cent to 29 per cent between 1990 and 2011, and extreme poverty dropping from 23 per cent to 11 per cent (ECLAC, 2013). However, income inequality, despite falling, remains high; the regional Gini coefficient is 0.48. The target groups of social programs remain vulnerable. To address these challenges successfully, a new generation of social programs needs to focus on the quality and relevance of education, protect households against risks, effectively redistribute income and at the same time promote productivity so as to ensure sustainable poverty reduction. Moreover, progress in reducing poverty must also contribute to the prosperity of a solid middle class.