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Title: Is the Decline of the Middle Class Greatly Exaggerated?
Citation Type: Miscellaneous
Publication Year: 2020
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Abstract: Numerous articles and books are written describing the apparent shrinking, decline, or death of the American middle class. 1 In this chapter, I present several of the key facts and review the veracity of some of the more widely held conceptions. Income inequality in the United States has grown in the last 30 years; the middle deciles have made significantly less progress in pre-tax income than the top decile. However, the income distribution is not becoming bimodal; instead there is a noticeable movement of households from the middle of the distribution to the upper part of the distribution. 2 Households in the middle of the income distribution are experiencing positive growth in income and consumption, though at a slower pace than the growth at the top. In the last 30 years, the likelihood of owning a home, owning two cars, or sending a child to college has risen for households across the income distribution including those in the middle class. Disturbingly, lower GDP growth and increased inequality in the distribution of that growth have combined to reduce the probability that children out-earn their parents at similar ages (Chetty et al. 2017). And measures of life expectancy and subjective well-being fell for some groups (Case and Deaton 2017; Blanchflower and Oswald 2019), although life expectancies in aggregate are again rising.
Url: https://www.economicstrategygroup.org/wp-content/uploads/2020/12/2.-Sacerdote.pdf
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Authors: Sacerdote, Bruce
Publisher: Aspen Institute
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Topics: Other
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