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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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  • Oliver Wavell Grant

    (Nuffield College, Oxford)

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    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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    File URL: http://www.economics.ox.ac.uk/materials/papers/2284/48grant.pdf
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    Bibliographic Info

    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
    Date of revision:
    Handle: RePEc:nuf:esohwp:_048

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

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    1. Anthony B. Atkinson & Andrea Brandolini, 2000. "Promise and Pitfalls in the Use of 'Secondary' Data-Sets: Income Inequality in OECD Countries," Temi di discussione (Economic working papers) 379, Bank of Italy, Economic Research and International Relations Area.
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    5. Matthew Higgins & Jeffrey G. Williamson, 1999. "Explaining inequality the world round: cohort size, Kuznets curves, and openness," Staff Reports 79, Federal Reserve Bank of New York.
    6. Robert J. Barro, 1999. "Inequality, Growth, and Investment," NBER Working Papers 7038, National Bureau of Economic Research, Inc.
    7. Kaushik Basu, 2003. "Analytical Development Economics: The Less Developed Economy Revisited," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262523442, January.
    8. Grant Oliver, 2002. "Max Weber and "Die Lage der Landarbeiter im ostelbischen Deutschland" a Statistical examination," Jahrbuch für Wirtschaftsgeschichte / Economic History Yearbook, De Gruyter, vol. 43(2), pages 61-84, December.
    9. 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.
    10. Bourguignon, Francois, 1990. "Growth and Inequality in the Dual Model of Development: The Role of Demand Factors," Review of Economic Studies, Wiley Blackwell, vol. 57(2), pages 215-28, April.
    11. 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.
    12. Klaus Deininger & Lyn Squire, 1996. "A New Data Set Measuring Income Inequality," CEMA Working Papers 512, China Economics and Management Academy, Central University of Finance and Economics.
    13. Hongyi Li & Lyn Squire & Tao Zhang & Heng-fu Zou, 1999. "A Data Set on Income Distribution," CEMA Working Papers 575, China Economics and Management Academy, Central University of Finance and Economics.
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    Cited by:
    1. Guillaume Daudin, 2008. "Domestic Trade and Market Size in Late Eighteenth-Century France," Economics Series Working Papers 69, University of Oxford, Department of Economics.
    2. Camilla Brautaset & Regina Grafe, 2006. "The Quiet Transport Revolution: Returns to scale, scope and network density in Norway's nineteenth-century sailing fleet," Oxford University Economic and Social History Series _062, Economics Group, Nuffield College, University of Oxford.
    3. Jane Humphries & Tim Leunig, 2007. "Cities, Market Integration and Going to Sea: Stunting and the Standard of Living in Early Nineteenth-Century England and Wales," Economics Series Working Papers 2007-W66, University of Oxford, Department of Economics.
    4. Mohammad Niaz Asadullah, 2006. "Educational Disparity in East and West Pakistan, 1947–71: Was East Pakistan Discriminated Against?," Oxford University Economic and Social History Series _063, Economics Group, Nuffield College, University of Oxford.

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