The Precarious Center: Structural Vulnerability and the Economic Squeeze of South Asia’s Lower Middle Class

This paper examines the lower middle class in South Asia as a structurally vulnerable “missing middle” caught between extreme poverty and genuine income security. It argues that conventional middle-class definitions often obscure the fragility of households that earn too much to qualify for targeted welfare yet too little to access private health care, quality education, or reliable financial protection. Drawing on evidence from India, Pakistan, Bangladesh, Sri Lanka, and West Bengal, the paper shows how this group is squeezed by informal employment, exclusion from social protection, catastrophic out-of-pocket health costs, rising education expenses, regressive taxation, inflation, and debt dependence. It also highlights how remittances, asset ownership, and consumer goods can create a false impression of security while masking deep exposure to economic shocks. The paper concludes that although the extreme poor remain the most deprived in absolute terms, the lower middle class is arguably the most systemically neglected and precariously positioned segment in South Asia, trapped in a cycle of permanent vulnerability without a stable path to upward mobility.