In this paper, using Bureau of the Census family income data we formally examine the income polarization hypothesis for the State of Connecticut. We ask and answer two questions. First, did the polarization of income deteriorate over the Great Recession years of 2007-2009? If the observed clustering around two opposite poles that existed in Connecticut prior to the Great Recession increased between the years immediately prior to the recession and immediately after (2006-2010) it would be consistent with the perception that the size of the middle class decreased over this period. Second, have income polarization and income inequality fared significantly differently during this period in the state? Income polarization and income inequality, albeit related, are generally distinct features of income distributions. There was no statistically significant change in the polarization of Connecticut’s income over the recent recessionary period. We also find that income inequality and income polarization followed distinct and different trajectories over the time period examined.
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Rodriguez, A. E. and Lane, Scott J., "Income Polarization and Income Inequality in Connecticut During the Great Recession" (2013). Economics & Business Analytics Faculty Publications. 8.
Rodriguez, A.E., and Lane, Scott J.(2013) “Income Polarization and Income Inequality in Connecticut During the Great Recession.” International Journal of Arts and Commerce, 2(1):113-126, July 2013.