Does Inequality Harm the Middle Class?

Authors: Winkelmann, Liliana; Winkelmann, Rainer

Source: Kyklos, Volume 63, Number 2, May 2010 , pp. 301-316(16)

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Abstract:

SUMMARY

The paper provides estimates of the effect of economic inequality on middle class well being in Switzerland. Economic well being is proxied by a person's satisfaction with his/her income. Two inequality indicators are used, one standard (the Gini coefficient of the pre-tax income distribution) and one novel (the number of luxury car registrations per 1000 population). Identification is through cross-sectional variation of these indicators at various levels of spatial aggregation. Results using data from the Swiss Household Panel confirm the existence of a robust inverse relationship between inequality and satisfaction among the middle class.

Document Type: Research article

DOI: http://dx.doi.org/10.1111/j.1467-6435.2010.00474.x

Affiliations: 1: University of Zurich, Socioeconomic Institute, Zuerichbergstr. 14, CH-8032 Zurich, Switzerland

Publication date: 2010-05-01