Globalization and youth progress: Heterogeneous effects across lower- and upper-middle-income countries

Youth development has emerged as a central concern in development policymaking, particularly in middle-income countries. Despite a growing body of literature on globalization and human well-being, empirical evidence on how the distinct dimensions of globalization affect youth-specific developmental outcomes in middle-income countries remains limited. This study examines the effects of the overall globalization index and its economic, political, and sociocultural dimensions on the Youth Progress Index (YPI) across 27 lower-middle-income and 29 upper-middle-income countries over the period 2011–2022. To this end, four dynamic panel data models are estimated using the Generalized Method of Moments (GMM). Per capita income, government expenditure on education, unemployment rate, and government effectiveness are included as control variables. The findings indicate that all dimensions of globalization exert a positive and statistically significant effect on the YPI in both country groups, though the magnitude of these effects varies. In lower-middle-income countries, the overall globalization index and political globalization carry the largest coefficients, whereas in upper-middle-income countries, the sociocultural dimension of globalization yields the highest estimated effect. Furthermore, per capita income, government expenditure on education, and government effectiveness are positively and significantly associated with youth progress, while the unemployment rate exerts a negative and significant effect in both country groups. These results suggest that the developmental benefits of globalization for youth are contingent upon national absorptive capacities and institutional quality. Accordingly, the study recommends strengthening institutional quality, investing in human capital development, and enhancing state capacity to translate the gains from globalization into inclusive opportunities.