Rapid middle-income growth over the past decades has led to increasing public interest in the developing world’s “new middle classes”. However, these transformations have received less attention in the comparative democratization and welfare-state regime literature. In this review article, we aim to fill this gap by identifying emerging evidence and new directions for research about the social and political consequences of lower-middle income growth. We note that, while socio-cultural and political transformations traditionally associated with expanding middle classes are unlikely to materialize at current levels of socio-economic wellbeing in most developing countries, new pressures for reform may arise out of demands to better protect modest increases in private assets and from improved educational outcomes among lower-middle income groups. We also identify signs of increased distributional conflicts between economically vulnerable lower-middle income groups and more-affluent middle classes that may undermine the transition to stable democracy and more inclusive social policy systems.