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Polarization and the Middle Class

Author

Listed:
  • Fernando Borraz

    () (Banco Central del Uruguay y Departamento de Economía, Facultad de Ciencias Sociales, Universidad de la República)

  • Nicolás Gonzalez Pampillón

    () (Universidad de Montevideo)

  • Máximo Rossi

    () (Departamento de Economía, Facultad de Ciencias Sociales, Universidad de la República)

Abstract

There is an increasing literature that discusses how to measure the middle class. Some approaches are based on an arbitrary deÖnition such as income quartiles or the poverty line. Recently, Foster and Wolfson developed a methodology which lacks of arbitrariness that enables us to compare the middle class of two di§erent income distributions. We apply this new tool jointly with a complementary method ñrelative distribution approach- to household income data in 1994-2004 and 2004-2010, to analyze the evolution of the middle class and polarization in Uruguay. During the Örst period, which is characterized by an increasing income inequality, we Önd that the middle class declined and income polarization increased. In the second one, where the Uruguayan economy experienced a recovery from the downturn su§ered in 2002, we Önd that the middle class rose and polarization decreased. However, this last result is attenuated when we do not consider the household income imputation because of the new health system implemented in 2008.

Suggested Citation

  • Fernando Borraz & Nicolás Gonzalez Pampillón & Máximo Rossi, 2011. "Polarization and the Middle Class," Documentos de Trabajo (working papers) 2011, Department of Economics - dECON.
  • Handle: RePEc:ude:wpaper:2011
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    References listed on IDEAS

    as
    1. Riccardo Massari & Maria Pittau & Roberto Zelli, 2009. "A dwindling middle class? Italian evidence in the 2000s," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 7(4), pages 333-350, December.
    2. Lykke Andersen, 2001. "Social Mobility in Latin America: Links with Adolescent Schooling," Research Department Publications 3130, Inter-American Development Bank, Research Department.
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    16. 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.
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    Citations

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    Cited by:

    1. Fabio Clementi & Francesco Schettino, 2013. "Income polarization in Brazil, 2001-2011: A distributional analysis using PNAD data," Economics Bulletin, AccessEcon, vol. 33(3), pages 1796-1815.
    2. repec:bla:revinw:v:63:y:2017:i:4:p:608-632 is not listed on IDEAS
    3. Khan, Haider Ali & Schettino, Francesco & Gabriele, Alberto, 2017. "Polarization and the Middle Class in China: a Non-Parametric Evaluation Using CHNS and CHIP Data," MPRA Paper 86133, University Library of Munich, Germany.
    4. Chiara Assunta Ricci, 2016. "The mobility of Italy’s middle income group," PSL Quarterly Review, Economia civile, vol. 69(277), pages 173-197.
    5. Zoya Nissanov & Maria Grazia Pittau, 2016. "Measuring changes in the Russian middle class between 1992 and 2008: a nonparametric distributional analysis," Empirical Economics, Springer, vol. 50(2), pages 503-530, March.
    6. Oasis Kodila-Tedika & Simplice A. Asongu & Julio Mukendi Kayembe, 2016. "Middle Class in Africa: Determinants and Consequences," International Economic Journal, Taylor & Francis Journals, vol. 30(4), pages 527-549, October.
    7. Clementi, Fabio & Molini, Vasco & Schettino, Francesco, 2018. "All that Glitters is not Gold: Polarization Amid Poverty Reduction in Ghana," World Development, Elsevier, vol. 102(C), pages 275-291.

    More about this item

    Keywords

    income polarization; middle class; inequality; social policies; bipolarization;

    JEL classification:

    • D3 - Microeconomics - - Distribution
    • D6 - Microeconomics - - Welfare Economics
    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty

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