The Journal of Economic Inequality

, Volume 8, Issue 2, pp 247–273

Polarization and the decline of the middle class: Canada and the U.S.

Article

DOI: 10.1007/s10888-009-9122-7

Cite this article as:
Foster, J.E. & Wolfson, M.C. J Econ Inequal (2010) 8: 247. doi:10.1007/s10888-009-9122-7

Abstract

Several recent studies have suggested that the distribution of income (earnings, jobs) is becoming more polarized. Much of the evidence presented in support of this view consists of demonstrating that the population share in an arbitrarily chosen middle income class has fallen. However, such evidence can be criticized as being range-specific—depending on the particular cutoffs selected. In this paper we propose a range-free approach to measuring the middle class and polarization, based on partial orderings. The approach yields two polarization curves which, like the Lorenz curve in inequality analysis, signal unambiguous increases in polarization. It also leads to an intuitive new index of polarization that is shown to be closely related to the Gini coefficient. We apply the new methodology to income and earnings data from the U.S. and Canada, and find that polarization is on the rise in the U.S. but is stable or declining in Canada. A cross-country comparison reveals the U.S. to be unambiguously more polarized than Canada.

Keywords

Income distribution Polarization Spread Bipolarity Inequality Lorenz curve Gini coefficient Middle class Canada United States 

Copyright information

© Springer Science+Business Media, LLC. 2009

Authors and Affiliations

  1. 1.Elliott School of International Affairs and Department of EconomicsThe George Washington UniversityWashingtonUSA
  2. 2.Oxford Poverty & Human Development Initiative, Oxford Dept of International DevelopmentUniversity of OxfordOxfordUK
  3. 3.Analysis and DevelopmentStatistics CanadaOttawaCanada

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