Inequality and growth in the very long run: Inferring inequality from data on social groups
AbstractThis 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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Bibliographic InfoPaper provided by Research Department of Statistics Norway in its series Discussion Papers with number 734.
Date of creation: Feb 2013
Date of revision:
Pre-industrial inequality; social tables; Kuznets curve; history;
Other versions of this item:
- Modalsli, Jørgen, 2011. "Inequality and growth in the very long run: inferring inequality from data on social groups," Memorandum 11/2011, Oslo University, Department of Economics.
- 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, 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
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-04-27 (All new papers)
- NEP-EVO-2013-04-27 (Evolutionary Economics)
- NEP-HIS-2013-04-27 (Business, Economic & Financial History)
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