1. Defining and Measuring the Middle Class Steven Pressman
Comments by Anne Hartung, University of Luxembourg

2. The paper in a nutshell Aims
Epistemology/academic discourse: Find a “good measure of middle class”
Apply this definition to LIS data (and show its evolution over time?)
Contributions
Focus on the middle while most research looks at the bottom and the top of the income distribution
Critical, detailed review of different definitions and operationalisation of middle class
Evolution of middle class over a long period of time

3. Income-based definition of middle class
Two “categorical” approaches
Proportion of the distribution (between 20th and 80th percentile)
Percentage of median household income
Here:
Based on Pew Survey (US, 2010) “How much income was necessary for a typical four person household to be middle class”: %
Disposable household income
Cash and near-cash earnings, capital income, private income, public transfers, less direct taxes

4. Drawbacks of applied definition
Based on US perception of middle class 2010 –
but is the understanding of middle class (living standards) really constant over time (crisis?) and across regions/neighbourhoods and countries?
The necessary income for middle class varies across time and countries, e.g. expenditures for housing, education, etc.
What is then the advantage relative to the first approach (middle quintiles)?
How arbitrary are these thresholds and what is the relative advantage to continuous measures of the middle class? Can this measure help to locate the middle class?

5. Income hierarchy in six countries
Source: Luxembourg Income Study (LIS) Database
Chauvel, L The intensity and shape of inequality: The ABG method of distributional analysis. Review of Income and Wealth.

6. Ignored but important facets of middle class
Focusing on disposable income ignores important facets of middle class (which however can be estimated with the LIS data)
Growing relevance of wealth relative to income (Piketty 2014)
Housing prices relative to income (Mack and Martínez-García 2011, Bradbury using LWS)
Intra-household earnings ratio
Labour stability …

7. Suggestions in sum Further potential to contribute to the debate:
Compare definitions against each other and point out implications (cf. aim of finding a “good measure”)
Relate empirical analysis to current debate on a broader range of aspects of middle class (possible with LIS)
Facilitate international comparison and relate to finding to Gornick and Jäntti (eds) 2013 Income Inequality: Economic Disparities and the Middle Class in Affluent Countries