Polarization and Inequality : an International Comparison

In this paper we analyze the trends in polarization in the US and other developed and transitional economies. Many studies have stressed the break in equalizing trends in income distributions in these countries. As polarization has emerged in the literature concerning the issue of income distribution, we here apply new contributions to the measurement of polarization proposed in Esteban, Ray and Gradín (1997) to describe their tendencies through time and across countries. Additionally, we investigate whether polarization was mainly due to increasing polarization between the groups or it was the result of their groups becoming internally more identified. This method allows us to analyze whether polarization between the groups has increased due to a larger income distance between the extreme groups or due to an increase in their sizes (shrinking the ámiddle class»). * I acknowledge the provision of data necessary for this paper by both LIS and University of Michigan.