The consequences of globalisation and structural change are an important topic in economic research. While many authors have focussed on the extremes of the qualification spectrum, i.e., unemployment of low-skilled individuals or the possible exodus of highly qualified workers (brain drain), this study evaluates the situation of middle class individuals.
The ifo-Institute will compile a report about "The Future of the German Middle Class" for the Herbert-Quandt-Foundation, cooperating with Prof. Stefan Hradil (Institute for Sociology, Johannes-Gutenberg-University Mainz) and Prof. Paul Nolte (Institute for Modern History, Free University Berlin). First we analyse functions and major changes of the middle class. In a second step, recommendations for a possible "Policy for the middle class" are presented.
In order to identify persons with "Middle Class" status in the data, we make use of certain socio-economic attributes (i.e., (vocational) education level, occupational status and service character of the occupation). We examine the changing work, income and wealth situation of persons from the middle class in respect to other individuals in the reference period.
In addition, we also perform some analyses for persons who have the education level needed to belong to the middle class, but who lack either on or both of the other middle-class characteristics (occupational status and/or service character of the occupation). These persons are refered to as "higher qualifications, without middle class status" constitut the (lower) boundary of the middle class.
We use existing data from the German Socioeconomic Panel (GSOEP).
Members of the "Middle Class" still earn higher incomes, exhibit more stable carrer paths and accumulate more wealth than the average employee. However, in recent years entrance into the middle class has become more difficult. Furthermore, we show that there are some signs of "erosion" at the boundaries of the middle class. Persons with higher qualifications, but without middle class status exhibit worse labor market performance and a higher degree of income inequality, even in comparison to the average employee. Based on theses results, we identify possible strategies for a "policy for the middle class", mainly the encouragement of "self-insurance-strategies" like education, accumulation of financial and material wealth as well as regional and occupational mobility.
Werding, Martin und Marinanne Müller (2007), "Globalisierung und Gesellschaftliche Mitte" in: Herbert-Quandt-Stiftung (eds)., "Zwischen Erosion und Erneuerung: Die gesellschaftliche Mitte in Deutschland", Frankfurt: Societätsverlag.
Müller, Marianne und Martin Werding, "Zur Lage der gesellschaftlichen Mitte in Deutschland", ifo Schnelldienst 60 (09), 2007, pp. 25-30.
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