Do Economic Recessions ‘Squeeze the Middle-Class’?

Alberto Batinti () and Joan Costa-Font

No 757, LIS Working papers from LIS Cross-National Data Center in Luxembourg

Abstract: We examine whether economic downturns reshape the distribution of population income giving rise to a “middle-class squeeze.” We test this hypothesis using alternative definitions of middle-class, such as income-based measures from the Luxembourg Income Study (LIS), and perceived measures from the Integrated Values Study (IVS). Our findings suggest that, although recessions do not produce a middle-class squeeze overall, the unanticipated shocks resulting from the Great Recession did. Furthermore, we find that recessions increase the share of the population that regards itself as ‘middle-class.’ Estimates are heterogeneous to the baseline unemployment at the time of a recession, country spending on social protection, to middle-class measures and definitions.

JEL-codes: F22 I30 J64 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2019-01
New Economics Papers: this item is included in nep-lab and nep-ltv
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Published in Economics and Politics 32, no. 3, (2020): 335-355. https://doi.org/10.1111/ecpo.12145

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http://www.lisdatacenter.org/wps/liswps/757.pdf (application/pdf)

Related works:
Journal Article: Do economic recessions “squeeze the middle class”? (2020)
Working Paper: Do economic recessions ‘squeeze the middle-class’? (2019)
Working Paper: Do Economic Recessions ‘Squeeze the Middle-Class’? (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:lis:liswps:757

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