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Defining and Measuring the Middle Class Defining and Measuring the Middle Class

Defining and Measuring the Middle Class - PowerPoint Presentation

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Defining and Measuring the Middle Class - PPT Presentation

Steven Pressman Comments by Anne Hartung University of Luxembourg The paper in a nutshell Aims Epistemologyacademic discourse Find a good measure of middle class Apply this definition to LIS data and show its evolution over time ID: 579827

income middle household class middle income class household countries relative time lis definition based percentage evolution 2010 earnings median

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Slide1

Defining and Measuring the Middle Class Steven Pressman

Comments by Anne

Hartung

, University of LuxembourgSlide2

The paper in a nutshellAims

Epistemology/academic discourse: Find a “good measure of middle class”

Apply this definition to LIS data (and show its evolution over time?)

Contributions

Focus on the middle while most research looks at the bottom and the top of the income distribution

Critical, detailed review of different definitions and

operationalisation

of middle class

Evolution of middle class over a long period of time

Slide3

Income-based definition of middle class Two “categorical” approachesProportion of the distribution (between 20

th

and 80

th

percentile)

Percentage of median household income

Here:

Percentage of median household income

Based on Pew Survey (US, 2010) “How much income was necessary for a typical four person household to be middle class”: 67-200%

Disposable household income

Cash and near-cash earnings, capital income, private income, public transfers, less direct taxesSlide4

Drawbacks of applied definitionBased on US perception of middle class 2010 –

but is the understanding of middle class (living standards) really constant over time (crisis?) and across regions/

neighbourhoods

and countries?

The necessary income for middle class varies across time and countries, e.g. expenditures for housing, education, etc.

What is then the advantage relative to the first approach (middle quintiles)?

How arbitrary are these thresholds and what is the relative advantage to continuous measures of the middle class? Can this measure help to locate the middle class?

Slide5

Income hierarchy in six countries

Source: Luxembourg Income Study (LIS)

Database

Chauvel

, L. 2016. The intensity and shape of inequality: The ABG method of distributional analysis.

Review of Income and Wealth

. Slide6

Ignored but important facets of middle classFocusing on disposable income ignores important facets of middle class (which however can be estimated with the LIS data)

Growing relevance of wealth relative to income (

Piketty

2014)

Housing prices relative to income (

Mack and Martínez-García 2011,

Bradbury 2013 using LWS

)

Intra-household earnings ratio

Labour

stability

… Slide7

Suggestions in sumFurther potential to contribute to the debate:Compare definitions against each other and point out implications (cf. aim of finding a “good measure”)

Relate empirical analysis to current debate on a broader range of aspects of middle class (possible with LIS)

Facilitate international comparison and relate to finding to

Gornick

 and

Jäntti

(

eds

) 2013

Income Inequality: Economic Disparities and the Middle Class in Affluent Countries