Featured Research

from universities, journals, and other organizations

U. S. Middle class prospering more than commonly believed, study finds

Date:
April 23, 2012
Source:
Cornell University
Summary:
Long portrayed as stagnant in economic terms, the income growth of the U.S. middle class may be much greater than suggested by economists like Thomas Piketty and Emmanuel Saez, according to a new study which finds median income of the U.S. middle class rose by as much as 37 percent from 1979-2007.

Long portrayed as stagnant in economic terms, the income growth of the U.S. middle class may be much greater than suggested by economists like Thomas Piketty and Emmanuel Saez, according to a new study at Cornell University.

Median income of the U.S. middle class rose by as much as 37 percent from 1979-2007 says Richard Burkhauser, Cornell professor of policy analysis and management, in the study, "A 'second opinion' on the economic health of the American middle class," published in the March issue of National Tax Journal. In contrast, when Piketty and Saez-style estimates were used, median income increased by only 3.2 percent over the same period.

Unlike the IRS data Piketty and Saez use, Burkhauser's team -- using data from the U.S. Census Bureau's Current Population Survey -- was able to show how much the income picture changes when taxes are subtracted from market income and government transfers such as welfare assistance, unemployment insurance and Social Security benefits are added. The team also adjusted for household size and the value of health insurance -- factors Burkhauser says more accurately reflect financial resources available to middle class individuals.

Says Burkhauser: "When we broaden our measure to include government taxes and transfers and look at households adjusted for size, the gains of middle class Americans are ten times larger. The gains are even more when we include the value of in-kind income such as the value of employer and government provided health insurance."

The study demonstrates how the decisions one makes about what to include when measuring income (market income vs. after tax and transfer income from all sources) and how that income is shared (by tax unit or by household) can substantially change the view of how the average American has fared over the last 30 years, and can have implications for public policy choices targeted at specific income classes.

Burkhauser's co-authors are Jeff Larrimore of the Joint Committee of Taxation, and Kosali Simon, professor of public and environmental affairs at Indiana University.


Story Source:

The above story is based on materials provided by Cornell University. Note: Materials may be edited for content and length.


Cite This Page:

Cornell University. "U. S. Middle class prospering more than commonly believed, study finds." ScienceDaily. ScienceDaily, 23 April 2012. <www.sciencedaily.com/releases/2012/04/120423131346.htm>.
Cornell University. (2012, April 23). U. S. Middle class prospering more than commonly believed, study finds. ScienceDaily. Retrieved September 16, 2014 from www.sciencedaily.com/releases/2012/04/120423131346.htm
Cornell University. "U. S. Middle class prospering more than commonly believed, study finds." ScienceDaily. www.sciencedaily.com/releases/2012/04/120423131346.htm (accessed September 16, 2014).

Share This



More Science & Society News

Tuesday, September 16, 2014

Featured Research

from universities, journals, and other organizations


Featured Videos

from AP, Reuters, AFP, and other news services

Some Tobacco Farmers Thrive Amid Challenges

Some Tobacco Farmers Thrive Amid Challenges

AP (Sep. 16, 2014) The South's tobacco country is surviving, and even thriving in some cases, as demand overseas keeps growers in the fields of one of America's oldest cash crops. (Sept. 16) Video provided by AP
Powered by NewsLook.com
Space Race Pits Bezos Vs Musk

Space Race Pits Bezos Vs Musk

Reuters - Business Video Online (Sep. 16, 2014) Amazon CEO Jeff Bezos' startup will team up with Boeing and Lockheed to develop rocket engines as Elon Musk races to have his rockets certified. Fred Katayama reports. Video provided by Reuters
Powered by NewsLook.com
President To Send 3,000 Military Personnel To Fight Ebola

President To Send 3,000 Military Personnel To Fight Ebola

Newsy (Sep. 16, 2014) President Obama is expected to send 3,000 troops to West Africa as part of the effort to contain Ebola's spread. Video provided by Newsy
Powered by NewsLook.com
EU Ministers and Experts Meet to Discuss Ebola Reponse

EU Ministers and Experts Meet to Discuss Ebola Reponse

AFP (Sep. 15, 2014) The European Commission met on Monday to coordinate aid that the EU can offer to African countries affected by the Ebola outbreak. Duration: 00:58 Video provided by AFP
Powered by NewsLook.com

Search ScienceDaily

Number of stories in archives: 140,361

Find with keyword(s):
Enter a keyword or phrase to search ScienceDaily for related topics and research stories.

Save/Print:
Share:

Breaking News:
from the past week

In Other News

... from NewsDaily.com

Science News

Health News

    Environment News

      Technology News



      Save/Print:
      Share:

      Free Subscriptions


      Get the latest science news with ScienceDaily's free email newsletters, updated daily and weekly. Or view hourly updated newsfeeds in your RSS reader:

      Get Social & Mobile


      Keep up to date with the latest news from ScienceDaily via social networks and mobile apps:

      Have Feedback?


      Tell us what you think of ScienceDaily -- we welcome both positive and negative comments. Have any problems using the site? Questions?
      Mobile: iPhone Android Web
      Follow: Facebook Twitter Google+
      Subscribe: RSS Feeds Email Newsletters
      Latest Headlines Health & Medicine Mind & Brain Space & Time Matter & Energy Computers & Math Plants & Animals Earth & Climate Fossils & Ruins