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The Comfortable, the Rich, and the Super-rich. What Really Happened to Top British Incomes During the First Half of the Twentieth Century?

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  • Peter Scott

    (Henley Business School, University of Reading)

  • James Walker

    (Henley Business School, University of Reading)

Abstract

We examine shifts in British income inequality and their causes between 1911 and 1949. Newly re-discovered Inland Revenue 1911 estimates and more detailed data from subsequent official income distribution enquiries are used to show that income was substantially more concentrated at the top of the income distribution in 1911 than previous estimates suggest, and that the top 1 per cent were the principal 'losers' in the subsequent trend towards reduced income inequality. We find that this trend reflected a sharp decline in top 'unearned' incomes - paralleling the findings of Piketty and Saez for France and the USA. This explains the paradox between the observed reduction in British income inequality and the lack of evidence for any substantial redistribution of income between salary and wage-earners.

Suggested Citation

  • Peter Scott & James Walker, 2018. "The Comfortable, the Rich, and the Super-rich. What Really Happened to Top British Incomes During the First Half of the Twentieth Century?," John H Dunning Centre for International Business Discussion Papers jhd-dp2018-07, Henley Business School, University of Reading.
    • Handle: RePEc:rdg:jhdxdp:jhd-dp2018-07
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    References listed on IDEAS

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    5. Lee Soltow, 1968. "Long-Run Changes in British Income Inequality," Economic History Review, Economic History Society, vol. 21(1), pages 17-29, April.
    6. Lindert, Peter H., 2000. "Three centuries of inequality in Britain and America," Handbook of Income Distribution, in: A.B. Atkinson & F. Bourguignon (ed.), Handbook of Income Distribution, edition 1, volume 1, chapter 3, pages 167-216, Elsevier.
    7. Atkinson, A. B. & Piketty, Thomas (ed.), 2010. "Top Incomes: A Global Perspective," OUP Catalogue, Oxford University Press, number 9780199286898.
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    9. James M. Poterba (ed.), 1993. "Tax Policy and the Economy, Volume 7," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262660814, December.
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    Cited by:

    1. Vincent Geloso & Peter Lindert, 2020. "Relative costs of living, for richer and poorer, 1688–1914," Cliometrica, Springer;Cliometric Society (Association Francaise de Cliométrie), vol. 14(3), pages 417-442, September.

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    More about this item

    Keywords

    Income inequality; United Kingdom;

    JEL classification:

    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • H87 - Public Economics - - Miscellaneous Issues - - - International Fiscal Issues; International Public Goods
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth

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