The wave of upbeat stories on the developing world's emerging middle class has reinvigorated a debate on how social class in general and the middle class in particular ought to be defined and empirically measured. With the aim of adding clarity to this debate, this dissertation provides a structured overview of a wide array of definitions of the middle class that have been suggested in the economics literature, and assesses their strengths and shortcomings using South Africa as a case study. Contrary to most standard approaches in the economic realm, the main argument this dissertation makes is that – in contexts marked by high inequality and socio-economic insecurity – social class is insufficiently understood by a person’s current standard of living alone. Addressing this concern, a novel conceptual framework is proposed that takes the unequal distribution of chances of upward and downward social mobility explicitly into consideration when defining class categories. It compares the proposed approach to those that have been suggested in the previous literature, investigates the sources of upward and downward mobility, and illustrates the main messages that can be learnt from linking the demarcation of social strata to an in-depth analysis of mobility patterns. Four main messages emerge from the analysis presented in this dissertation: First, the chosen indicator(s) of social class will certainly make a clear difference not only with respect to the estimated size and growth of the middle class, but especially with regard to its characteristics, needs, and relationship to other economic or political. Second, the notion of economic security and stability is central to the social and political meanings of being middle class. The stable middle class that is identified using (in-)vulnerability to poverty as a class-defining criterion will generally be much smaller than approaches relying on less demanding criteria suggest. For the specific case of South Africa, this research shows that only one out of four persons can be considered stably middle class or elite. Conversely, about half of the population are locked in persistent structural poverty. Third, if the growth of a stable middle class is a desired development outcome and focus of government policy, then an explicit focus on the stability and quality of employment is essential. Not only the lack of jobs, but also the prevalence of casual and precarious forms of work impede the development of a stable middle class. Lastly, there is an important extent of heterogeneity in the political attitudes of the middle class, which is determined by whether people perceive themselves as winners or losers under the existing political system. While those who perceive themselves as being downwardly mobile display signs of political resignation, those people who perceive themselves as upwardly mobile tend, on average, to be less concerned with corruption and more tolerant of government constraints on political freedoms.