A reconsideration of what and who is middle class in South Africa

Working Paper 249
Author(s): 
Justin Visagie and Dorrit Posel
Publication date: 
October, 2011
Classification-JEL: 

In this paper, we revisit 'what and who' is middle class in South Africa using data collected in the 2008 National Income Dynamics Study. First we consider how to identify the middle class based on two broad definitions adopted in the international literature: a middle class defined by the middle share of the national income distribution; and a middle class defined by an absolute level of affluence and lifestyle. We explore alternative ways of capturing the ‘middle strata’ of the national income distribution; and we suggest an approach for identifying threshold levels of income associated with middle-class affluence. Second, we show that both the size and the composition of the middle class in South Africa are very sensitive to how the middle class is defined. In particular, we demonstrate that there is very little overlap between the two broad definitions, a finding which reflects very high levels of poverty and inequality in the country. Lastly, both definitions of the middle class are shown to be robust to two common issues of measurement, namely the inclusion of implied rental income, and the use of expenditure as opposed to income as the basis for measuring class status.

Publication PDF: 
Total downloads: 
3 577