Book•
The Great Recession and the Distribution of Household Income
01 Mar 2013-
TL;DR: This article showed that the changes between 2007 and 2009 in household incomes in total and on avera ge, in income inequality, and in poverty rates, were modest in most of the countries studied, in spite of the depth of the recession in most countries.
Abstract: The ‘Great Recession’ was the worst macroeconomic downturn since the 1930s in most OECD countries. In many economies, subsequent recovery has been sluggish, and has sometimes turned into a new recession. The paper in vestigates the effects of the Great Recession on the distribution of household incomes. It shows that the changes between 2007 and 2009 in household incomes in total and on avera ge, in income inequality, and in poverty rates, were modest in most of the countries studied , in spite of the depth of the recession in most countries. This outcome is remarkably differen t from the far more dramatic experience of the Great Depression, although not so different from some recent recessions such as the Nordic crisis of the early 1990s. During the GR, th e household sector was protected from the impact of the downturn by both automatic stabiliser s and additional support of governments through the tax and benefit system. The post-2009 d istributional impacts of the GR are likely to have been considerably larger however, with grea ter differences across countries emerging.
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Book•
24 Jan 2017
TL;DR: The "Four Horsemen" of leveling-mass-mobilization warfare, transformative revolutions, state collapse, and catastrophic plagues-have repeatedly destroyed the fortunes of the rich as discussed by the authors.
Abstract: Are mass violence and catastrophes the only forces that can seriously decrease economic inequality? To judge by thousands of years of history, the answer is yes. Tracing the global history of inequality from the Stone Age to today, Walter Scheidel shows that it never dies peacefully. The Great Leveler is the first book to chart the crucial role of violent shocks in reducing inequality over the full sweep of human history around the world. The "Four Horsemen" of leveling-mass-mobilization warfare, transformative revolutions, state collapse, and catastrophic plagues-have repeatedly destroyed the fortunes of the rich. Today, the violence that reduced inequality in the past seems to have diminished, and that is a good thing. But it casts serious doubt on the prospects for a more equal future. An essential contribution to the debate about inequality, The Great Leveler provides important new insights about why inequality is so persistent-and why it is unlikely to decline anytime soon.
278 citations
TL;DR: This article reviewed the long run developments in the distribution of personal income and wealth and discussed suggested explanations for the observed patterns, and showed that inequality was historically high almost everywhere at the beginning of the twentieth century.
Abstract: This paper reviews the long run developments in the distribution of personal income and wealth. It also discusses suggested explanations for the observed patterns. We try to answer questions such as: What do we know, and how do we know, about the distribution of income and wealth over time? Are there common trends across countries or over the path of development? How do the facts relate to proposed theories about changes in inequality? We present the main inequality trends, in some cases starting as early as in the late eighteenth century, combining previous research with recent findings in the so-called top income literature and new evidence on wealth concentration. The picture that emerges shows that inequality was historically high almost everywhere at the beginning of the twentieth century. In some countries this situation was preceded by increasing concentration, but in most cases inequality seems to have been relatively constant at a high level in the nineteenth century. Over the twentieth century inequality decreased almost everywhere for the first 80 years, largely due to decreasing wealth concentration and decreasing capital incomes in the top of the distribution. Thereafter trends are more divergent across countries and also different across income and wealth distributions. Econometric evidence over the long run suggests that top shares increase in periods of above average growth while democracy and high marginal tax rates are associated with lower top shares.
236 citations
Cites background or result from "The Great Recession and the Distrib..."
...See Jenkins et al. (2013) for an overview of the recent financial crises pointing to varying effects on inequality across countries. 129 Note, however, that statutory taxes and actual taxes paid by top income earners are not the same. In particular, during the 1950s and 1960s available evidence suggests that top rates were only paid well above the P99 level (see Roine, Vlachos, and Waldenström, 2009, and references therein). Scheve and Stasavage (2010, 2012) argue that the increased wartime taxation of the rich can be related to a political process of equal sacrifices, where the wars forced the masses to put up with their and in return the rich were forced to put up with their wealth. 130 Roine, Vlachos, Waldenström (2009) also show that the cummulative effects of the relatively small short run impact of taxes found in their econometric analysis are consistent with much larger effects over time....
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...See Jenkins et al. (2013) for an overview of the recent financial crises pointing to varying effects on inequality across countries....
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TL;DR: This study measures the impact of the COVID-19 lockdowns on workers’ economic hardship and mental health, and documents a steep occupational prestige level gradient on the probability of facing economic hardship during the lockdowns, which evidently exacerbate socioeconomic inequalities.
Abstract: The COVID-19 economic crash is idiosyncratic because of its virtual standstill of economic activity. We therefore ask how individual labor market experiences are related to the development of mental health complaints in the spring of 2020. As clinical data collection was compromised during the lockdowns, standardized surveys of the European labor force provide an opportunity to observe mental health complaints as the crisis unfolded. Data are representative of active members of the labor force of six European nations that contained varying levels of COVID-19 burdens in terms of mortality and lockdown measures. We document a steep occupational prestige level gradient on the probability of facing economic hardship during the lockdowns-looming job loss, income loss, and workload decline-which evidently exacerbate socioeconomic inequalities. Analyses indicate a striking positive relationship between instantaneous economic hardships during the COVID-19 lockdown and expressing feelings of depression and health anxiety. Importantly, the magnitude of the association between such hardships and indicators of mental health deterioration is highly dependent on workers' occupational standing, revealing a second layer of exacerbating inequality.
191 citations
TL;DR: In this article, the authors examined the distributional effects of fiscal consolidation for 17 OECD countries over the period 1978-2009 and found that fiscal consolidation has typically had significant distributional effect by raising inequality, decreasing wage income shares and increasing long-term unemployment.
Abstract: This paper examines the distributional effects of fiscal consolidation. Using episodes of fiscal consolidation for a sample of 17 OECD countries over the period 1978–2009, we find that fiscal consolidation has typically had significant distributional effects by raising inequality, decreasing wage income shares and increasing long-term unemployment. The evidence also suggests that spending-based adjustments have had, on average, larger distributional effects than tax-based adjustments.
131 citations
TL;DR: In this paper, the authors assess the impact of fiscal consolidation on income inequality and find that income inequality significantly rises during periods of such consolidation, suggesting that the burden associated with the effort affects disproportionately households at the bottom of the income distribution.
Abstract: In this paper, we assess the impact of fiscal consolidation on income inequality. Using a panel of 18 industrialized countries from 1978 to 2009, we find that income inequality significantly rises during periods of fiscal consolidation. In addition, while fiscal policy that is driven by spending cuts seems to be detrimental for income distribution, tax hikes seem to have an equalizing effect. We also show that the size of the fiscal consolidation program (in percentage of GDP) has an impact on income inequality. In particular, when consolidation plans represent a small share of GDP, the income gap widens, suggesting that the burden associated with the effort affects disproportionately households at the bottom of the income distribution. Considering the linkages between banking crises and fiscal consolidation, we find that the effect on the income gap is amplified when fiscal adjustments take place after the resolution of such financial turmoil. Similarly, fiscal consolidation programs combined with inflation are likely to increase inequality and the effects of fiscal adjustments on inequality are amplified during periods of relatively low growth. Our results also provide support for a non-linear relationship between inequality and income and corroborate the idea that trade can promote a more equal distribution of income.
124 citations
References
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Book•
01 Jan 1990
TL;DR: In this paper, Esping-Andersen distinguishes three major types of welfare state, connecting these with variations in the historical development of different Western countries, and argues that current economic processes such as those moving toward a post-industrial order are shaped not by autonomous market forces but by the nature of states and state differences.
Abstract: Few discussions in modern social science have occupied as much attention as the changing nature of welfare states in Western societies. Gosta Esping-Andersen, one of the foremost contributors to current debates on this issue, here provides a new analysis of the character and role of welfare states in the functioning of contemporary advanced Western societies. Esping-Andersen distinguishes three major types of welfare state, connecting these with variations in the historical development of different Western countries. He argues that current economic processes, such as those moving toward a postindustrial order, are shaped not by autonomous market forces but by the nature of states and state differences. Fully informed by comparative materials, this book will have great appeal to all those working on issues of economic development and postindustrialism. Its audience will include students of sociology, economics, and politics."
16,883 citations
TL;DR: The authors showed that the large shocks that capital owners experienced during the Great Depression and World War II have had a permanent effect on top capital incomes and argued that steep progressive income and estate taxation may have prevented large fortunes from fully recovering from these shocks.
Abstract: This paper presents new homogeneous series on top shares of income and wages from 1913 to 1998 in the United States using individual tax returns data. Top income and wages shares display a U-shaped pattern over the century. Our series suggest that the large shocks that capital owners experienced during the Great Depression and World War II have had a permanent effect on top capital incomes. We argue that steep progressive income and estate taxation may have prevented large fortunes from fully recovering from these shocks. Top wage shares were flat before World War II, dropped precipitously during the war, and did not start to recover before the late 1960s but are now higher than before World War II. As a result, the working rich have replaced the rentiers at the top of the income distribution.
3,263 citations
TL;DR: This paper analyzed the effect of Chinese import competition between 1990 and 2007 on US local labor markets, exploiting cross-market variation in import exposure stemming from initial diffe cerence to US labor markets.
Abstract: We analyze the effect of rising Chinese import competition between 1990 and 2007 on US local labor markets, exploiting cross-market variation in import exposure stemming from initial diffe...
2,818 citations
"The Great Recession and the Distrib..." refers background in this paper
...While Autor et al. (2011) refute the assertion that his findings suggest a need for trade restrictions, this trend deserves more analysis and suggests a need for more-skilled U....
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Book•
01 Jan 2008
TL;DR: The authors The Race between education and technology: America Once Led and Can Win the Race for Tomorrow The Race Between Education and Technology: America's Graduation from High School and Mass Higher Education in the Twentieth Century Part III.
Abstract: * Introduction Part I: Economic Growth and Distribution * The Human Capital Century * Inequality across the Twentieth Century * Skill-biased Technological Change Part II: Education for the Masses in Three Transformations * The Origins of the Virtues * Economic Foundations of the High School Movement * America's Graduation from High School * Mass Higher Education in the Twentieth Century Part III. The Race * The Race between Education and Technology * How America Once Led and Can Win the Race for Tomorrow * Appendix A * Appendix B * Appendix C * Appendix D * Notes * References * A Note on Sources * Acknowledgments * Index
2,627 citations
TL;DR: In this paper, the authors identify some common traits of the welfare states of Italy, Spain, Por tugal and Greece, with special attention to in stitutional and political aspects, and propose a model to compare them.
Abstract: This article tries to identify some common traits of the welfare states of Italy, Spain, Por tugal and Greece, with special attention to in stitutional and political aspects.
2,588 citations