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Research on Middle Class earns second major award for SPEA’s Kosali Simon

December 10, 2013
Bloomington, Indiana --

Kosali SimonKosali Simon has once again been honored for her groundbreaking research into the prosperity of America’s middle class. Simon, along with two co-authors, has received the 2013 Addington Prize in Measurement, awarded by the Fraser Institute.

Simon, a professor in the School of Public and Environmental Affairs at Indiana University Bloomington, wrote "A 'Second Opinion' on the Economic Health of the American Middle Class and why it Matters in Gauging the Impact of Government Policy." Her study with co-authors Richard Burkhauser (Cornell University) and Jeff Larrimore (Joint Committee on Taxation, U.S. Congress) was published in the National Tax Journal.

The Simon-Burkhauser-Larrimore team showed the economic growth of the middle class has been greater than that suggested by other economists. They found median income of the U.S. middle class rose by as much as 37 percent from 1979 to 2007 while previous studies had suggested only a 3.2 percent jump. They used data from the U.S. Census Bureau's Current Population Survey, showing how much the income picture changes when taxes are subtracted from market income and government transfers such as welfare assistance, unemployment insurance and Social Security benefits are added.

The article had previously been awarded the Musgrave Prize as the best article to appear in the journal. It is available online to members of the National Tax Association. A version of the article prepared as a working paper for the National Bureau of Economic Research is also available online.

The Addington Prize is awarded by the Fraser Institute and honors Raymond Fraser, the former chair of its board of trustees. It is awarded to scholars who have “researched a new, interesting and important concept in public policy, exemplifying the Fraser Institute’s motto: If it matters, measure it.”

Senior fellows with the Institute nominate papers for the prize. Once finalists are selected, Steve Easton of Simon Fraser University leads the process by which the recipient is selected with the papers judge on originality, the significance of the ideas and other criteria.

Dr. Simon joins prestigious company in accepting the award, now in its third year. The 2012 Addington Prize went to Nicholas Bloom (Stanford University), Steven Davis (University of Chicago) and Scott Baker (Stanford University) for their paper “Measuring Economic Policy Uncertainty.”