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Does Industrialisation Push Up Inequality? New Evidence on the Kuznets Curve from Nineteenth-Century Prussian Tax Statistics

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Author Info
Oliver Wavell Grant (Nuffield College, Oxford)
Abstract

This paper presents new estimates of income inequality derived from Prussian tax statistics for the years 1822-1914. Confidence intervals are also calculated. The results show a rise in inequality in the nineteenth century, with a peak around 1906, thus supporting the view put forward by Simon Kuznets that industrialisation will initially lead to a rise in inequality. The paper goes on to consider whether this was due to factors which were particular to Germany in the period, or whether the Kuznets curve is the result of forces which affect all industrialising societies. The conclusion reached is that the Kuznets curve is an avoidable trap, not an automatic consequence of industrialisation.

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Paper provided by Economics Group, Nuffield College, University of Oxford in its series Oxford University Economic and Social History Series with number _048.

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Length: 58 pages
Date of creation: 01 Sep 2002
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Handle: RePEc:nuf:esohwp:_048

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Web page: http://www.nuff.ox.ac.uk/economics/

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  1. Dollar, David & Kraay, Aart, 2001. "Growth is good for the poor," Policy Research Working Paper Series 2587, The World Bank. [Downloadable!]
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  2. Robert J. Barro, 1999. "Inequality, Growth, and Investment," NBER Working Papers 7038, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  3. Anand, Sudhir & Kanbur, S. M. R., 1993. "The Kuznets process and the inequality--development relationship," Journal of Development Economics, Elsevier, vol. 40(1), pages 25-52, February. [Downloadable!] (restricted)
  4. Bourguignon, Francois, 1990. "Growth and Inequality in the Dual Model of Development: The Role of Demand Factors," Review of Economic Studies, Blackwell Publishing, vol. 57(2), pages 215-28, April. [Downloadable!] (restricted)
  5. Tony Atkinson, 2002. "Top Incomes in the United Kingdom Over the Twentieth Century," Oxford University Economic and Social History Series _043, Economics Group, Nuffield College, University of Oxford. [Downloadable!]
  6. Deininger, Klaus & Squire, Lyn, 1996. "A New Data Set Measuring Income Inequality," World Bank Economic Review, Oxford University Press, vol. 10(3), pages 565-91, September.
  7. Bruno, Michael & Ravallion, Martin & Squire, Lyn, 1996. "Equity and growth in developing countries : old and new perspectives on the policy issues," Policy Research Working Paper Series 1563, The World Bank. [Downloadable!]
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