The Measure of the Middle Class

42 Pages Posted: 15 Jan 2021

Date Written: January 7, 2021

Abstract

The term, ‘middle class’, is constantly used to describe some average group of individuals, households or families. Various definitions and measures are used within the public policy, media and academic arenas. And, yet, there is no definitive consensus as to what middle class means or how to measure it.

It seems that there are a number of nuances to the concept of the middle class that may not lend itself to direct measurement, outside of specialized surveys. The most common approach to defining and measuring the middle class is through the use of some form of income. Generally the concept of the money income seems to the broadest and most useful, through it presents certain problems upon closer examination.

Other metrics used or proposed include wealth and consumption. Wealth as a metric is often of interest especially where there is concern over inequality. The consumption metric is more directly related to income, but the manner in which it is defined and collected is where it may present certain advantages over income.

There are more subjective aspects of this topic which is often used to better identify those belonging to the middle class. Its qualitative nature makes it difficult to measure on some consistent basis. However, it seems that this area needs further exploration.

The purpose of this paper is not to delve into the areas of poverty or inequities of the income or wealth distribution. It sole purpose is to attempt to examine the definition of middle class that may lead to a useful metric to measure it. As to the various metrics available, an examination of the standard ones will be made, as well as some non-standard ones. The paper's objective is to highlight which metrics may be most appropriate and what changes should be made to provide a more robust method of measuring the middle class.

Assuming one can define, albeit imperfectly, a middle class, then it naturally follows that a lower class and upper class will also be defined.

Keywords: Middle class, economic class, income, wealth, consumption, subjective metrics

JEL Classification: D31, D33, G41, H31, J31, P00

Suggested Citation

Tanimura, Steven, The Measure of the Middle Class (January 7, 2021). Available at SSRN: https://ssrn.com/abstract=3761966 or http://dx.doi.org/10.2139/ssrn.3761966

Steven Tanimura (Contact Author)

Independent ( email )

Monroe, NJ
United States

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