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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
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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. Robert J. Barro, 1999. "Inequality, Growth, and Investment," NBER Working Papers 7038, National Bureau of Economic Research, Inc.
    2. Kaushik Basu, 2003. "Analytical Development Economics: The Less Developed Economy Revisited," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262523442, December.
    3. 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.
    4. Deininger, Klaus & Squire, Lyn, 1996. "A New Data Set Measuring Income Inequality," World Bank Economic Review, World Bank Group, vol. 10(3), pages 565-91, September.
    5. Bourguignon, Francois & Morrisson, Christian, 1998. "Inequality and development: the role of dualism," Journal of Development Economics, Elsevier, vol. 57(2), pages 233-257.
    6. 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.
    7. Dollar, David & Kraay, Aart, 2002. " Growth Is Good for the Poor," Journal of Economic Growth, Springer, vol. 7(3), pages 195-225, September.
    8. Atkinson, A.B. & Brandolini, A., 2000. "Promise and Pitfalls in the Use of 'Secondary' Data -Sets: Income Inequality in OECD Countries," Papers 379, Banca Italia - Servizio di Studi.
    9. Feinstein, Charles, 1988. "The Rise and Fall of the Williamson Curve," The Journal of Economic History, Cambridge University Press, vol. 48(03), pages 699-729, September.
    10. Tony Atkinson, 2002. "Top Incomes in the United Kingdom Over the Twentieth Century," Economics Series Working Papers 2002-W43, University of Oxford, Department of Economics.
    11. 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.
    12. 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.
    13. 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.
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    Cited by:
    1. Regina Grafe & Camilla Brautaset, 2006. "The Quiet Transport Revolution: Returns to Scale, Scope and Network Density in Norway`s Nineteenth-Century Sailing Fleet," Economics Series Working Papers 2006-W62, University of Oxford, Department of Economics.
    2. 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.
    3. Guillaume Daudin, 2008. "Domestic Trade and Market Size in Late Eighteenth-Century France," Economics Series Working Papers 69, University of Oxford, Department of Economics.
    4. J.Humphries & T. Leunig, 2007. "Cities, Market Integration and Going to Sea: Stunting and the standard of living in early nineteenth-century England and Wales," Oxford University Economic and Social History Series _066, Economics Group, Nuffield College, University of Oxford.

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