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A "Second Opinion" on the Economic Health of the American Middle Class

Richard Burkhauser (), Jeff Larrimore () and Kosali Simon ()

No 17164, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Researchers considering levels and trends in the resources available to the middle class traditionally measure the pre-tax cash income of either tax units or households. In this paper, we demonstrate that this choice carries significant implications for assessing income trends. Focusing on tax units rather than households greatly reduces measured growth in middle class income. Furthermore, excluding the effect of taxes and the value of in-kind benefits further reduces observed improvements in the resources of the middle class. Finally, we show how these distinctions change the observed distribution of benefits from the tax exclusion of employer provided health insurance.

JEL-codes: H2 H24 I18 J3 (search for similar items in EconPapers)
Date: 2011-06
New Economics Papers: this item is included in nep-acc
Note: HC HE LS PE
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Published as Richard V. Burkhauser & Jeff Larrimore & Kosali I. Simon, 2012. "A "Second Opinion" on the Economic Health of the American Middle Class," National Tax Journal, vol 65(1), pages 7-32.

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