Arbeitspapier
What determines top income shares? Evidence from the twentieth century
This paper studies determinants of income inequality using a newly assembled panel of 16 countries over the entire twentieth century. We focus on three groups of income earners: the rich (P99-100), the upper middle class (P90-99), and the rest of the population (P0-90). The results show that periods of high economic growth disproportionately increases the top percentile income share at the expense of the rest of the top decile. Financial development is also pro-rich and the outbreak of banking crises is associated with reduced income shares of the rich. Trade openness has no clear distributional impact (if anything openness reduces top shares). Government spending, however, is negative for the upper middle class and positive for the nine lowest deciles but does not seem to affect the rich. Finally, tax progressivity reduces top income shares and when accounting for real dynamic effects the impact can be important over time.
- Language
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Englisch
- Bibliographic citation
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Series: IFN Working Paper ; No. 721
- Classification
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Wirtschaft
Personal Income, Wealth, and Their Distributions
Trade: General
General Financial Markets: General (includes Measurement and Data)
Taxation, Subsidies, and Revenue: General
Economic History: Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy: General, International, or Comparative
- Subject
-
Top incomes
Income inequality
Financial development
Trade openness
Government spending
Taxation
Economic development
Einkommensverteilung
Finanzmarkt
Handelsliberalisierung
Entwicklung
Wirtschaftsgeschichte
Industriestaaten
- Event
-
Geistige Schöpfung
- (who)
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Roine, Jesper
Vlachos, Jonas
Waldenström, Daniel
- Event
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Veröffentlichung
- (who)
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Research Institute of Industrial Economics (IFN)
- (where)
-
Stockholm
- (when)
-
2007
- Handle
- Last update
-
10.03.2025, 11:44 AM CET
Data provider
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Object type
- Arbeitspapier
Associated
- Roine, Jesper
- Vlachos, Jonas
- Waldenström, Daniel
- Research Institute of Industrial Economics (IFN)
Time of origin
- 2007
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