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Inequality and growth in the very long run: inferring inequality from data on social groups

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  • Modalsli, Jørgen

    (Dept. of Economics, University of Oslo)

Abstract

Income distribution data from before the Industrial Revolution usually comes in the shape of social tables: inventories of a range of social groups and their mean incomes. These are frequently reported without adjusting for within-group income dispersion, leading to a systematic downward bias in the reporting of pre industrial inequality. This paper suggests a correction method, and applies it to an existing collection of twenty-five social tables, from Rome in AD 1 to India in 1947. The corrections, using a variety of assumptions on within-group dispersion, lead to substantial increases in the Gini coefficients. Combining the inequality levels with data on GDP, a robust positive relationship between income inequality and economic growth is confirmed. This supports earlier proposals, based on fewer data points, of a "super Kuznets curve" of increasing inequality over the entire pre-industrial period.

Suggested Citation

  • Modalsli, Jørgen, 2011. "Inequality and growth in the very long run: inferring inequality from data on social groups," Memorandum 11/2011, Oslo University, Department of Economics.
    • Handle: RePEc:hhs:osloec:2011_011
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    Cited by:

    1. Wouter Ryckbosch, 2016. "Editor's choice Economic inequality and growth before the industrial revolution: the case of the Low Countries (fourteenth to nineteenth centuries)," European Review of Economic History, European Historical Economics Society, vol. 20(1), pages 1-22.
    2. Popov, Vladimir, 2014. "Socialism is dead, long live socialism!," MPRA Paper 54294, University Library of Munich, Germany.
    3. Lindert, Peter H. & Nafziger, Steven, 2014. "Russian Inequality on the Eve of Revolution," The Journal of Economic History, Cambridge University Press, vol. 74(3), pages 767-798, September.
    4. Michiel de Haas, 2022. "Reconstructing income inequality in a colonial cash crop economy: five social tables for Uganda, 1925–1965 [Long-term trends in income inequality: winners and losers of economic change in Ghana, 18," European Review of Economic History, European Historical Economics Society, vol. 26(2), pages 255-283.
    5. Wouter Ryckbosch, 2014. "Economic inequality and growth before the industrial revolution: A case study of the Low Countries (14th-19th centuries)," Working Papers 067, "Carlo F. Dondena" Centre for Research on Social Dynamics (DONDENA), Università Commerciale Luigi Bocconi.
    6. Young, Alwyn, 2011. "The Gini coefficient for a mixture of Ln-Normal populations," LSE Research Online Documents on Economics 54246, London School of Economics and Political Science, LSE Library.
    7. Milanovic, Branko, 2011. "A short history of global inequality: The past two centuries," Explorations in Economic History, Elsevier, vol. 48(4), pages 494-506.

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    More about this item

    Keywords

    Pre-industrial inequality; social tables; Kuznets curve; history;
    All these keywords.

    JEL classification:

    • C65 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Miscellaneous Mathematical Tools
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • N30 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - General, International, or Comparative
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development

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