Tuesday, 15 October 2019

Recessions and size of the middle class

a column by Joan Costa-i-Font and Alberto Batinti for VOX: CEPR’s Policy Portal

A sizeable middle class is essential to protect societies against socioeconomic and political instability.

This column examines the effect of economic recessions on the size of the middle class using different income-based and self-perception definitions. It finds that anticipated recessions do not produce an overall middle-class squeeze, but unanticipated shocks such as the Great Recession do. It also finds that recessions increase the share of the population that regards itself as middle class.

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