IDEAS home Printed from https://ideas.repec.org/p/lis/liswps/517.html
   My bibliography  Save this paper

Public Policies and the Middle Class throughout the World in the Mid 2000s

Author

Listed:
  • Steven Pressman

Abstract

This paper updates and extends my earlier work, published in the Journal of Economic Issues, on how the middle class fares throughout the world. My 2007 paper provided a definition of the middle class as well as estimates of the size of the middle class in several nations. It argued that the fraction of households that are middle class across nations and over time is mainly determined by government tax and spending policies. The more progressive the national tax system, and the more generous government spending programs, the larger is the proportion of middle-class households. This empirical work on the middle class was done using the Luxembourg Income Study (LIS), an international database containing extensive income as well as socio-demographic information. LIS databases center around particular years, called “waves”. Each wave is around 5 years apart, with Wave #1 beginning in the early 1980s. For my previous research, data was available only up Wave #5 (around 2000), and Wave #5 data was unavailable for some countries. More Wave #5 data is available, and some data for Wave #6, centered around 2004, has come online recently. This provides an opportunity to assess what has happened to inequality and the size of the middle class in the early 2000s. In addition, my earlier work focused only on aggregate tax and spending by governments; it did not look at specific policies and how these promoted a middle class in different nations. This paper focuses on three specific sorts of national spending policy that assist households and affect the size of the middle class across nations and over time. First, there are policies that aid the unemployed and disabled. Second, there are retirement programs that provide income to older households. Third, there are policies that assist families with children (child or family allowances, family leave policies and child support payments). It examines the extent to which each of these policies increased the size of the middle class in the early 2000s, the impact of the set of these three policies on the middle class in the early 2000s, as well as other possible determinants of the size of the middle class in the 2000s.

Suggested Citation

  • Steven Pressman, 2009. "Public Policies and the Middle Class throughout the World in the Mid 2000s," LIS Working papers 517, LIS Cross-National Data Center in Luxembourg.
    • Handle: RePEc:lis:liswps:517
    as

    Download full text from publisher

    File URL: http://www.lisdatacenter.org/wps/liswps/517.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Timothy Smeeding & Gunther Schmaus & Brigitte Buhmann & Lee Rainwater, 1988. "Equivalence Scales, Well-Being, Inequality and Poverty: Sensitivity Estimates Across Ten Countries Using the LIS Database," LIS Working papers 17, LIS Cross-National Data Center in Luxembourg.
    2. Marcia Meyers & Katherin Ross Phillips & Janet Gornick, 1996. "Supporting the Employment of Mothers: Policy Variation Across Fourteen Welfare States," LIS Working papers 139, LIS Cross-National Data Center in Luxembourg.
    3. Steven Pressman, 1993. "Tax Expenditures for Child Exemptions: A Poor Policy to Aid America’s Children," Journal of Economic Issues, Taylor & Francis Journals, vol. 27(3), pages 699-719, September.
    4. Steven Pressman, 1992. "Child Exemptions or Child Allowances," American Journal of Economics and Sociology, Wiley Blackwell, vol. 51(3), pages 257-272, July.
    5. Christian Weller, 2008. "The Erosion of Middle-Class Economic Security After 2001," Challenge, Taylor & Francis Journals, vol. 51(1), pages 45-68.
    6. Steven Pressman & Robert Scott, 2009. "Consumer Debt and the Measurement of Poverty and Inequality in the US," Review of Social Economy, Taylor & Francis Journals, vol. 67(2), pages 127-148.
    7. Steven Pressman, 2007. "The Decline of the Middle Class: An International Perspective," Journal of Economic Issues, Taylor & Francis Journals, vol. 41(1), pages 181-200, March.
    8. Timothy Smeeding & Gunther Schmaus & Serge Allegreza, 1985. "An Introduction to LIS - The Luxembourg Income Study," LIS Working papers 1, LIS Cross-National Data Center in Luxembourg.
    9. Heather Boushey & Christian Weller, 2008. "Has Growing Inequality Contributed to Rising Household Economic Distress?," Review of Political Economy, Taylor & Francis Journals, vol. 20(1), pages 1-22.
    10. repec:bla:revinw:v:34:y:1988:i:2:p:115-42 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Koen Caminada & Chen Wang, 2011. "Disentangling Income Inequality and the Redistributive Effect of Social Transfers and Taxes in 36 LIS Countries," LIS Working papers 567, LIS Cross-National Data Center in Luxembourg.
    2. Koen Caminada & Kees Goudswaard & Chen Wang & Jinxian Wang, 2019. "Income Inequality and Fiscal Redistribution in 31 Countries After the Crisis," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 61(1), pages 119-148, March.
    3. Ursula Dallinger, 2011. "The Endangered Middle Class? A Comparative Analysis of the Role Public Redistribution Plays," LIS Working papers 565, LIS Cross-National Data Center in Luxembourg.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Katherine Baird, 2014. "The US Safety Net in an Era of Middle Class Decline: Has it drifted from the poor?," LIS Working papers 617, LIS Cross-National Data Center in Luxembourg.
    2. Steven Pressman, 2009. "Keynes, Family Allowances and Post Keynesian Anti-Poverty Policy," LIS Working papers 525, LIS Cross-National Data Center in Luxembourg.
    3. Ilaria Petrarca & Roberto Ricciuti, 2015. "Relative income distribution in six European countries: market and disposable income," LIS Working papers 629, LIS Cross-National Data Center in Luxembourg.
    4. Hanna Karolina Szymborska, 2022. "Rethinking inequality in the 21st century – inequality and household balance sheet composition in financialized economies," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 45(1), pages 24-72, January.
    5. Steven Pressman, 2014. "Keynes, family allowances, and Keynesian economic policy," Review of Keynesian Economics, Edward Elgar Publishing, vol. 2(4), pages 508-526, October.
    6. Steven Pressman, 2014. "Keynes, Family allowances and Keynesian economic policy," LIS Working papers 616, LIS Cross-National Data Center in Luxembourg.
    7. Steven Pressman, 2011. "The Middle Class in Less Developed American Nations," LIS Working papers 557, LIS Cross-National Data Center in Luxembourg.
    8. Angela Daley & Thesia I. Garner & Shelley Phipps & Eva Sierminska, 2020. "Differences across Place and Time in Household Expenditure Patterns: Implications for the Estimation of Equivalence Scales," Economic Working Papers 520, Bureau of Labor Statistics.
    9. Katarzyna Growiec & Jakub Growiec, 2016. "Bridging Social Capital and Individual Earnings: Evidence for an Inverted U," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 127(2), pages 601-631, June.
    10. Herwig Immervoll & Horacio Levy & José Ricardo Nogueira & Cathal O´Donoghue & Rozane Bezerra de Siqueira, 2005. "The Impact of Brazil´s Tax-Benefit System on Inequality and Poverty," Ibero America Institute for Econ. Research (IAI) Discussion Papers 117, Ibero-America Institute for Economic Research.
    11. Çakır, Mustafa Yavuz & Kabundi, Alain, 2013. "Trade shocks from BRIC to South Africa: A global VAR analysis," Economic Modelling, Elsevier, vol. 32(C), pages 190-202.
    12. Deniz Sevinc & Edgar Mata Flores & Simon Collinson, 2020. "Are there inequality spillovers? Evidence through a modified inequality measure and European dynamics of inequality," Working Papers 545, ECINEQ, Society for the Study of Economic Inequality.
    13. Till Treeck, 2014. "Did Inequality Cause The U.S. Financial Crisis?," Journal of Economic Surveys, Wiley Blackwell, vol. 28(3), pages 421-448, July.
    14. Li, Yating & Fei, Yinxin & Zhang, Xiao-Bing & Qin, Ping, 2019. "Household appliance ownership and income inequality: Evidence from micro data in China," China Economic Review, Elsevier, vol. 56(C), pages 1-1.
    15. Pedro Salas-Rojo & Juan Gabriel Rodríguez, 2022. "Inheritances and wealth inequality: a machine learning approach," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 20(1), pages 27-51, March.
    16. Akanksha Srivastava & Sanjay Mohanty, 2012. "Poverty Among Elderly in India," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 109(3), pages 493-514, December.
    17. Cem Baslevent & Meltem Dayoglu, 2005. "The Effect of Squatter Housing on Income Distribution in Urban Turkey," Urban Studies, Urban Studies Journal Limited, vol. 42(1), pages 31-45, January.
    18. Mahmud Rice, James & Goodin, Robert E. & Parpo, Antti, 2006. "The Temporal Welfare State: A Crossnational Comparison," Journal of Public Policy, Cambridge University Press, vol. 26(3), pages 195-228, December.
    19. Burkhauser, Richard V. & Larrimore, Jeff & Simon, Kosali I., 2012. "A "Second Opinion" on the Economic Health of the American Middle Class," National Tax Journal, National Tax Association;National Tax Journal, vol. 65(1), pages 7-32, March.
    20. Peter ven de Ven & Anne Harrison & Barbara Fraumeni & Dennis Fixler & David Johnson & Andrew Craig & Kevin Furlong, 2017. "A Consistent Data Series to Evaluate Growth and Inequality in the National Accounts Note: The views expressed in this research, including those related to statistical, methodological, technical, or op," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 63, pages 437-459, December.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:lis:liswps:517. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Piotr Paradowski (email available below). General contact details of provider: https://edirc.repec.org/data/lisprlu.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.