Do economic recessions “squeeze the middle class”?

Alberto Batinti*, Joan Costa-Font

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

4 Citations (Scopus)


We examine whether economic downturns are linked to the distribution of population income giving rise to an observed “middle class squeeze.” We test this hypothesis using a novel and unique dataset using the Luxembourg Income Study (LIS) and allowing us to construct alternative definitions of middle class, such as income-based measures, including labor income based, and perceived measures from the Integrated Values Study (IVS). Our findings suggest that, although recessions are not consistently correlated with middle class squeeze overall, the more unanticipated shocks resulting from the Great Recession show consistently through several definitions, a negative and robust conditional correlation. Furthermore, we find that recessions are positively correlated with the share of the population that regards itself as “middle class.” Estimates are heterogeneous to the baseline unemployment at the time of a recession, country spending on social protection, to middle class measures and definitions.

Original languageEnglish
Pages (from-to)335-355
Number of pages21
JournalEconomics and Politics
Issue number3
Publication statusPublished - 1 Nov 2020


  • economic recessions
  • employment shocks
  • income distribution
  • middle class size


Dive into the research topics of 'Do economic recessions “squeeze the middle class”?'. Together they form a unique fingerprint.

Cite this