Post-colonial trends of income inequality: Evidence from the overseas departments of France

The link between former colonies and their colonizers has implications for inequality in the post-colonial period. In this paper, I provide evidence from a unique setting in which former colonies were administratively assimilated into the colonial metropolis. Putting together a novel income tax dataset for the four oldest French colonies, now overseas departments of France, I estimate the evolution of income inequality from decolonization in 1946 to the present. I find that the top income shares declined rapidly since decolonization but remained consistently higher than in mainland France. Exploiting contemporary administrative data, I document that mainland-born individuals are over-represented at the top of the labor income distribution and in the high-paying public sector in the overseas departments. Thus, while departmentalization reduced overall inequality, it perpetuated a legacy of colonial income hierarchies into the post-colonial era.