OECD Development Centre Working Papers

ISSN :
1815-1949 (online)
DOI :
10.1787/18151949
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The OECD Development Centre links OECD members with developing and emerging economies and fosters debate and discussion to seek creative policy solutions to emerging global issues and development challenges. This series of working papers is intended to disseminate the OECD Development Centre’s research findings rapidly among specialists in the field concerned. These papers are generally available in the original English or French, with a summary in the other language.
 

The Emerging Middle Class in Developing Countries You or your institution have access to this content

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Author(s):
Homi Kharas
Publication Date
26 Jan 2010
Bibliographic information
No.:
285
Pages
61
DOI
10.1787/5kmmp8lncrns-en

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The shift in global goods production towards Asia is well documented. But global consumer demand has so far been concentrated in the rich economies of the OECD. Will that also shift towards Asia as these countries get richer? This paper defines a global middle class as all those living in households with daily per capita incomes of between USD10 and USD100 in PPP terms. By combining household survey data with growth projections for 145 countries, it shows that Asia accounts for less than one-quarter of today’s middle class. By 2020, that share could double. More than half the world’s middle class could be in Asia and Asian consumers could account for over 40 per cent of global middle class consumption. This is because a large mass of Asian households have incomes today that position them just below the global middle class threshold and so increasingly large numbers of Asians are expected to become middle class in the next ten years. The paper explores how this can help sustain global growth in the medium term, driven by product differentiation, branding and marketing in the new growth markets of Asia.
Keywords:
Chile, firm level data
JEL Classification:
  • F01: International Economics / General / Global Outlook
  • O10: Economic Development, Technological Change, and Growth / Economic Development / General
  • O12: Economic Development, Technological Change, and Growth / Economic Development / Microeconomic Analyses of Economic Development