A B S T R A C T

The purpose of the research is to comparatively analyze the structure of financial sources of the middle class in Azerbaijan across the public and private sectors. Rather than focusing solely on income levels, the research emphasizes the source, stability, and institutional protection of income as key determinants of middle-class sustainability.

The methodology of the research - the study employs descriptive statistical analysis and comparative institutional analysis. Income and employment structures in the public and private sectors are examined, and a cross-country comparison is conducted to assess the role of institutional environment in shaping middle-class formation.

The practical importance of the research - the findings provide practical insights for socio-economic policy design aimed at strengthening middle-class financial stability and reducing structural income risks. The study contributes to a clearer understanding of economic behavior patterns under high state dependency and the institutional constraints limiting the expansion of private-sector-based middle-class formation.

The results of the research - the results indicate that a significant share of Azerbaijan’s middle class is directly or indirectly dependent on public-sector and budget-based income sources. While public employment ensures income stability and social protection, it reinforces risk-averse economic behavior and institutional dependency. The private sector offers potentially higher and more flexible income opportunities; however, institutional uncertainty and limited independent capital accumulation weaken its capacity to generate a sustainable middle class. Comparative evidence confirms a strong linkage between the structure of middle-class income sources and the level of institutional quality and economic freedom.

The originality and scientific novelty of the research - lies in analyzing the middle class not merely through income levels but through the institutional characteristics and sustainability of income sources. Income diversification is conceptualized not as a normative policy appeal but as a technical necessity for mitigating structural economic risks, offering an alternative analytical perspective to the existing literature.

Keywords: middle class; income sources; state sector; private sector; economic dependency; institutional environment; economic freedom.

http://doi.org/10.59610/bbu1.2026.1.3.