Documents de Jong, Eelco 2 results

"This essay demonstrates the importance of the contributions made to the evolution of the middle class by independently acquired market incomes, the redistribution of incomes resulting from transfers and taxation, and the changing patterns of household formation as reflected by the equivalisation of incomes. The consequent reallocation of households over the classes (poor, middle, and rich) is measured by the changes in gross incomes of the shifting households. This shows that the direct share of the middle class in market incomes is small and has shrunk significantly - to the advantage of the rich class, which has expanded strongly. This is due to the upward shift of labour earnings, especially of two-earner households. However, taxation and the equivalisation of incomes largely neutralise the decline of the middle class. An important implication is that many two-earner households obtain rich earnings in the labour market initially, mostly by combining middle-class jobs, but they can afford only a middle-class lifestyle."

"This paper studies the position of the middle class in the Netherlands from the vantage point of the distribution of gross household incomes, i.e. all taxable incomes derived from market activities and transfers. From there it considers the effects of three mechanisms affecting incomes: 1. the acquisition of market incomes, 2. the redistribution to net incomes by means of social transfers received and income tax and social contributions paid, and 3. the equivalization of net incomes that serves to estimate the worth of the income for the receiving household in view of its needs and economies of scale. The first and the second relate to the core concern in the public debate on the middle class: is its societal status and significance under threat or not? Is it still maintained by the independent procurement of (market) income, or is that diminishing or changing? Is it propped up, more or less than before, by the redistribution of income, or is it even losing income? Is it supported or weakened by changes in household formation that affect the equivalization of incomes? In addition to income, wealth and debt are examined for the resilience they may offer to households. "