Polarization and the Middle Class in Uruguay

Fernando Borraz ^[3] ; Nicolás González ^[1] ; Máximo Rossi ^[2]
1. [1] Universidad de Montevideo
  
  Universidad de Montevideo
  
  Uruguay
2. [2] Universidad de la República
  
  Universidad de la República
  
  Uruguay
3. [3] Banco Central del Uruguay
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Localización: Latin American Journal of Economics: formerly Cuadernos de Economía, ISSN-e 0719-0433, Vol. 50, Nº. 2, 2013, págs. 289-326
Idioma: inglés
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Resumen
- Some approaches to measuring the middle class are based on an arbitrary definition such as income quartiles or the poverty line. Foster and Wolfson have recently developed a methodology without arbitrariness. We apply this tool and a complementary method–the relative distribution approach–to analyze the evolution of the middle class and polarization in Uruguay during the 1994-2004 and 2004-2010 periods. During the first period, characterized by increasing income inequality, the middle class declines and income polarization increases. In the second period, which includes the recovery from the 2002 downturn, we find that the middle class increases and polarization decreases.