A Methodology for Updating International Middle-Class Lines for the Latin American and Caribbean Region

The middle class in Latin America and the Caribbean has been a central focus of policy debates in the region since the COVID-19 pandemic began. To identify and track vulnerable and middle-class populations accurately, it is necessary to update the upper and lower bounds for the middle class using 2017 purchasing power parity exchange rates. This paper contributes with a two-step methodology for updating these thresholds. The method indicates that updating the USD 13 lower-bound line in 2011 purchasing power parity dollars to 2017 purchasing power parity dollars results in a vulnerability line of USD 14. The study also finds an upper bound of USD 81 per person per day in 2017 purchasing power parity, compared with USD 70 in 2011 purchasing power parity. These thresholds are robust to a variety of assumptions and methodologies. The results of this study indicate that the proportion of the population in Latin America and the Caribbean classified as middle class increased from 36.3 percent in 2011 to 37.2 percent in 2017. However, there were no significant changes in the characteristics of this group