In the media and research, there is increasing talk about status and relegation fears of the middle class. The consequences of an increasing descent of the middle class into the lower income bracket would be, in addition to personal income losses and effects on life satisfaction, an inequality of distribution and polarization of income throughout society. The distribution of income, particularly in the middle class, has been influenced by the structural, economic and business changes of recent decades. These changes include, for example, a changed household structure due to the increase in one-person households. This has a negative impact on incomes, since smaller households are less able to generate savings through joint economic activity than larger ones. This leads to an increase in the inequality of income distribution. However, an increase in general income inequality must be viewed differently from polarization. Income inequality measures the extent to which the total income of the population is unequally distributed among individuals. When incomes are polarized, the income structure shifts in such a way that both the top and bottom income groups gain in quantitative weight, while the middle group becomes smaller. Because of the invalidity of the Pigou-Dalton transfer axiom for polarization measurement, it is important to distinguish between inequality and polarization measures. A more detailed investigation of income polarization is necessary from a welfare economics perspective, since income determines the welfare function of society as a whole. On the other hand, polarized income distribution poses many dangers for society. A high proportion of people in the lower income bracket can lead to structural changes in cities. Poor people can only afford low rents. As a result, there is a danger of the emergence of shantytowns, which could be characterized by resignation and pessimism about the future. Increased dissatisfaction can lead to a rising potential for violence and social unrest. The aim of this project is to analyze the polarization of income. On the one hand, it will be examined whether incomes polarize due to a decline of the middle and whether the outer fringes move further apart. The analysis, also using data from the Socio-Economic Panel, will use different measures of polarization and seek to identify determinants. First results have already been presented to the public and are currently being processed in a discussion paper.