HOW THE MIDDLE CLASS LIVES ON $2 TO $10 A DAY.

HOW THE MIDDLE CLASS LIVES ON $2 TO $10 A DAY. I posted here and here on an article describing how the very poor live on $1 a day and here on some young people in India who have moved up to earning $5 a day. The Economist for February 2 has an article on a paper by Abhijit Banerjee and Esther Duflo about the lives of people spending $2 to $10 a day (in current dollars, roughly between 1000 and $5000 a year). The paper can be found here. Banerjee and Duflo refer to these people as “the middle class.” (Take note that 88% if the people in rural India live on less than the $1000 a year which marks the boundary for the middle class.) One of their major conclusions is that the middle class is not strikingly entrepreneurial. Many of the middle classes have tiny businesses–but just as high a percentage of the poor have tiny businesses. Banerjee and Duflo think that, “The key distinction between the middle class and the poor is who they are working for and on what terms.” They conclude that: “Nothing seems more middle class than the fact of having a steady, well-paying job.”