Abstract

GACHET, Iván; GRIJALVA, Diego F; PONCE, Paúl  and  RODRIGUEZ, Damián. The rise of the middle class in Ecuador during the oil boom. Cuad. Econ. [online]. 2017, vol.36, n.spe72, pp.327-352. ISSN 0121-4772.  https://doi.org/10.15446/cuad.econ.v36n72.65821.

In this paper we analyse the evolution of the middle class in Ecuador during the commodities boom (2005-2015). Using the definition of middle class proposed by López-Calva and Ortiz-Juárez (2014), we document an impressive rise of the middle class, which doubled in this period and peaked at 37.4% of the population in 2015. We show that both economic growth and inequality reduction have played an important role in this social change, although growth is responsible for over three-quarters thereof. Based on an analysis of the macroeconomic and labour conditions associated with the evolution of the middle class, we argue that the recent slow-down in growth and in inequality reduction following the end of the commodities boom poses a risk for the size of the middle class, which represents a serious challenge for policy makers.

JEL: D31, I32, O1.

Keywords : Ecuador; middle class; inequality; commodities boom.

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