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

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This paper presents a new method for calculating Gini coefficients from tabulations of the mean income of social classes. Income distribution data from before the Industrial Revolution usually come in the form of such tabulations, called social tables. Inequality indices generated from social tables are frequently calculated without adjusting for within-group income dispersion, leading to a systematic downward bias in the reporting of pre-industrial inequality. The correction method presented in this paper is applied 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 suggests a positive relationship between income inequality and economic growth. This supports earlier proposals, based on fewer data points, of a "super Kuznets curve" of increasing inequality over the entire pre-industrial period.

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  • Jørgen Modalsli, 2013. "Inequality and growth in the very long run: Inferring inequality from data on social groups," Discussion Papers 734, Statistics Norway, Research Department.
    • Handle: RePEc:ssb:dispap:734
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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:

    • 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
    • C65 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Miscellaneous Mathematical Tools

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