## Mapping Income Polarization in the United States

_IMF Blog, May 15, 2018_

## Source details

**Canonical URL:** [Mapping Income Polarization in the United States](https://www.imf.org/en/blogs/articles/2018/05/15/blog-mapping-income-polarization-in-the-united-states)

## Other formats

- [Markdown version](/en/blogs/articles/2018/05/15/blog-mapping-income-polarization-in-the-united-states/index.md)
- [Structured JSON version](/en/blogs/articles/2018/05/15/blog-mapping-income-polarization-in-the-united-states/index.json)
- [Bundle manifest](/en/blogs/articles/2018/05/15/blog-mapping-income-polarization-in-the-united-states/bundle-manifest.json)

## Bibliographic details
- Authors: Ali Alichi, Rodrigo Mariscal
- Published: May 15, 2018

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### Key findings
- Middle-income households are defined as those earning between 50 percent and 150 percent of the median income.
- The share of middle-income households fell from 58 percent in 1968 to 48 percent in 2016.
- Of families leaving the middle-income group, a greater proportion fell into the low-income ranks (described as downward hollowing out or polarization) than advanced to upper income levels.
- Hollowing-Out Indices were created for each of the 50 U.S. states and the District of Columbia for 2000-2016 to highlight state-level differences in middle-class hollowing out.

### Drivers and measurement
- Technological progress is measured by job routinization.
- International trade is measured by job offshoring.
- The study finds that technological progress and international trade together can explain more than half of the rise in income polarization, with broadly equal contributions from each.

### State-level patterns and examples
- Nevada and Arkansas had the greatest increase in polarization during 2000-2016; in these states education played only a small countervailing role while technology and international trade lowered living standards for some middle-income households.
- Massachusetts and New Mexico experienced among the smallest increases in income polarization during 2000-2016; in these states technology and international competition had less impact and education did more to keep households in the middle class.
- The interplay between job routinization, job offshoring, and household characteristics (particularly education) produces divergent outcomes for middle-income households across states.

### Policy implications and recommendations
- Investment in education is identified as an effective, state-level tool to address income polarization.
- Better education has had important countervailing effects on income polarization, helping to keep households in the middle class despite forces of technological change and international competition.

*Ali Alichi and Rodrigo Mariscal, May 15, 2018 — “Hollowing Out: The Channels of Income Polarization in the United States.”*

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## References

- [Ali Alichi](https://blogs.imf.org/bloggers/ali-alichi/)
- [Rodrigo Mariscal](https://blogs.imf.org/bloggers/rodrigo-mariscal/)
- [Português](http://www.imf.org/pt/News/Articles/2018/05/22/blog-mapping-income-polarization-in-the-united-states)
- [https://www.imf.org/wp-content/uploads/2018/05/BLOG-1024x600-income-polarization-istock-by-getty-images-iStock-846567624.jpg](https://www.imf.org/wp-content/uploads/2018/05/BLOG-1024x600-income-polarization-istock-by-getty-images-iStock-846567624.jpg)
- [study](http://www.imf.org/en/publications/wp/issues/2017/11/15/hollowing-out-the-channels-of-income-polarization-in-the-united-states-45375)
- [https://www.imf.org/wp-content/uploads/2018/05/eng-may-10-us-map2.png](https://www.imf.org/wp-content/uploads/2018/05/eng-may-10-us-map2.png)

_Source: https://www.imf.org/en/blogs/articles/2018/05/15/blog-mapping-income-polarization-in-the-united-states_