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

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 US and Canada, and find that polarization is on the rise in the US but is stable or declining in Canada. A cross-country comparison reveals the US to be unambiguously more polarized than Canada.

A Comparison of Inequality and Living Standards in Canada and the United States Using an Expanded Measure of Economic Well-Being

“…In a later study, Foster and Wolfson (2010) also examined inequality of family disposable income in the United States and Canada in the 1980s. The authors concluded that inequality increased in the US from 1979 to 1986, while it decreased in Canada from 1981 to 1987.…”

Inequality and polarisation in health systems’ responsiveness: A cross-country analysis

“…The issue has motivated a growing literature on the concept of polarisation. Love and Wolfson (1976) introduced the concept of polarisation between two social groups, which prompted the development of bi-polarisation measures such as those proposed in Foster and Wolfson (2010), and Wolfson (1994Wolfson ( , 1997. Ray (1994, 1999) and Duclos et al (2004) pioneered a different line of research focused on multi-group polarisation, and based on the concepts of within-group identification and between group alienation.…”

“…Ray (1994, 1999) and Duclos et al (2004) pioneered a different line of research focused on multi-group polarisation, and based on the concepts of within-group identification and between group alienation. 4 Within health economics, and following the strand of literature initiated by Foster and Wolfson (2010) and Allison and Foster (2004), Apouey (2007Apouey ( , 2010 proposed a specific measure of bi-polarisation for the case of self-assessed health. However, this is yet to find wide applicability in empirical work in this area.…”

Spatial Polarization of the Ecological Footprint Distribution

“…Since the initial work of Esteban and Ray (1994) and Foster andWolfson (1992 [2010]), different statistical measures have been proposed to analyse polarization. We will focus on those that have recently received more attention in empirical work.…”