Monday, December 5, 2011

Latin American Middle Classes:The Distance between Perception and Reality

Definitions of the middle class used in the economic literature are mainly based on objective measures that classify as such the group of people who are neither at the top nor at the bottom of the distribution of a statistically measurable characteristic such as income or consumption.

However, as these definitions often rely on arbitrary boundaries around measures of central tendency, quantiles of the distribution or absolute thresholds, there is little agreement on what the middle class is. In addition, the economic literature has ignored that social class also refers to social status, meaning place in a social hierarchy on the basis of life opportunities, life-styles and attitudes. Sociologists (Hodge and Treiman, 1968; Jackman and Jackman, 1982; Wright and Singelmann, 1982) argue that no consideration of social class is complete without taking into account the perceptions of individuals, as these may not coincide completely with their objective class position but are likely to affect their behavior and choices.

In the context of today’s Latin American countries, social class should be understood as both a subjective and an economic phenomenon that is the result of a more dynamic social mobility fostered by increases in income per capita and changes in people’s subjective interpretation of their class position and of their aspirations. T

his paper has two objectives. First, it aims to identify which objective definitions are closest to a subjective classification of middle-class status by exploring different income-based measures of social class and their association with a self-perceived social ranking. Since the mismatches between the objective and the subjective classifications are fairly large, the second objective of this paper is to explore what factors, in addition to income, are associated with the self-perceived social ranking of Latin American households.

The remainder of this paper is organized as follows. Section 2 presents a brief literature review of the concept of middle class. The data source is introduced in Section 3. In Section 4, we present alternative measures of the objective middle classes and their matching with the selfclassification. Section 5 explores the correlates of self-perceived social status and their ability to identify self-perceived social classes. The main conclusions are summarized in Section 6.

Inter-American Development Bank.(IDB working paper series ; 275). Author(s):Fajardo,Deisy Johanna.Lora, Eduardo. Published: December 2011.Code: IDB-WP-275.

Latin American Middle Classes:The Distance between Perception and Reality.