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Polarization and the Middle Class in Uruguay

  • Fernando Borraz
  • Nicolás González
  • Máximo Rossi

Some approaches to measuring the middle class are based on an arbitrary definition such as income quartiles or the poverty line. Foster and Wolfson have recently developed a methodology without arbitrariness. We apply this tool and a complementary method–the relative distribution approach–to analyze the evolution of the middle class and polarization in Uruguay during the 1994-2004 and 2004-2010 periods. During the first period, characterized by increasing income inequality, the middle class declines and income polarization increases. In the second period, which includes the recovery from the 2002 downturn, we find that the middle class increases and polarization decreases.

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File URL: http://www.economia.puc.cl/docs/107764_laje_502289.pdf
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Article provided by Instituto de Economía. Pontificia Universidad Católica de Chile. in its journal Latin American Journal of Economics-formerly Cuadernos de Economia.

Volume (Year): 50 (2013)
Issue (Month): 2 (November)
Pages: 289-326

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Handle: RePEc:ioe:cuadec:v:50:y:2013:i:2:p:289-326
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  1. Eduardo Lora & Johanna Fajardo, 2011. "Latin American Middle Classes: The Distance between Perception and Reality," IDB Publications (Working Papers) 65158, Inter-American Development Bank.
  2. Robert J. Barro, 1999. "Determinants of Democracy," Journal of Political Economy, University of Chicago Press, vol. 107(S6), pages S158-S183, December.
  3. Lopez-Calva, Luis F. & Ortiz-Juarez, Eduardo, 2011. "A vulnerability approach to the definition of the middle class," Policy Research Working Paper Series 5902, The World Bank.
  4. Leonardo Gasparini & Matias Horenstein & Ezequiel Molina & Sergio Olivieri, 2008. "Income Polarization in Latin America: Patterns and Links with Institutions and Conflict," Oxford Development Studies, Taylor & Francis Journals, vol. 36(4), pages 461-484.
  5. Easterly, William, 2000. "the middle class consensus and economic development," Policy Research Working Paper Series 2346, The World Bank.
  6. Esteban, Joan & Ray, Debraj, 1994. "On the Measurement of Polarization," Econometrica, Econometric Society, vol. 62(4), pages 819-51, July.
  7. Abhijit V. Banerjee & Esther Duflo, 2008. "What Is Middle Class about the Middle Classes around the World?," Journal of Economic Perspectives, American Economic Association, vol. 22(2), pages 3-28, Spring.
  8. Fernando Borraz & Nicolás González, 2009. "Impact of the Uruguayan Conditional Cash Transfer Program," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 46(134), pages 243-271.
  9. Cecilia Garcia-Penalosa & Eve Caroli & Philippe Aghion, 1999. "Inequality and Economic Growth: The Perspective of the New Growth Theories," Journal of Economic Literature, American Economic Association, vol. 37(4), pages 1615-1660, December.
  10. Lykke Andersen, 2001. "Social Mobility in Latin America: Links with Adolescent Schooling," Research Department Publications 3130, Inter-American Development Bank, Research Department.
  11. marina, azzimonti, 2009. "Barriers to investment in polarized societies," MPRA Paper 25936, University Library of Munich, Germany.
  12. Riccardo Massari & Maria Pittau & Roberto Zelli, 2009. "A dwindling middle class? Italian evidence in the 2000s," Journal of Economic Inequality, Springer, vol. 7(4), pages 333-350, December.
  13. François Bourguignon & Christian Morrisson, 2001. "Inequality among World Citizens : 1820-1992," DELTA Working Papers 2001-18, DELTA (Ecole normale supérieure).
  14. Marcelo Bérgolo & Guillermo Cruces, 2011. "Labor Informality and the Incentive Effects of Social Security: Evidence from a Health Reform in Uruguay," IDB Publications (Working Papers) 62318, Inter-American Development Bank.
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