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The long-run history of income inequality in Denmark: Top incomes from 1870 to 2010

Author

Listed:
  • A. B. Atkinson

    (Nuffield College, Oxford and Institute for New Economic Thinking at the Oxford Martin School)

  • J. E. Søgaard

    (University of Copenhagen and the Danish Ministry of Finance)

Abstract

We use historical publications and – for more recent years – micro-data from the income tax and wealth tax returns to estimate the development in income inequality in Denmark over the last 140 years. The paper breaks new ground in treating the specific features of the Danish Tax system and in analysing the implications of the switch from joint to individual taxation. We show that income inequality have declined substantially over the last century with an income share for the top 1 per cent dropping from 27.6 per cent from its peak in 1917 to 6.4 in 2010. However the decline is not simply a secular downward trend consistent with the downward part of a Kuznets curve. Instead there seems to be several distinct phases, interleaved with periods of stability.

Suggested Citation

  • A. B. Atkinson & J. E. Søgaard, 2013. "The long-run history of income inequality in Denmark: Top incomes from 1870 to 2010," EPRU Working Paper Series 2013-01, Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics.
  • Handle: RePEc:kud:epruwp:13-01
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    File URL: http://web.econ.ku.dk/eprn_epru/Workings_Papers/WP-13-01.pdf
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    References listed on IDEAS

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    1. Thomas Piketty & Emmanuel Saez & Stefanie Stantcheva, 2014. "Optimal Taxation of Top Labor Incomes: A Tale of Three Elasticities," American Economic Journal: Economic Policy, American Economic Association, vol. 6(1), pages 230-271, February.
    2. Anthony B. Atkinson & Thomas Piketty & Emmanuel Saez, 2011. "Top Incomes in the Long Run of History," Journal of Economic Literature, American Economic Association, vol. 49(1), pages 3-71, March.
    3. Simon Halphen Boserup & Jori Veng Pinje, 2010. "Tax Evasion, Information Reporting, and the Regressive Bias Hypothesis," EPRU Working Paper Series 2010-13, Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics.
    4. Ohlsson, Henry & Roine, Jesper & Waldenstrom, Daniel, 2006. "Long-Run Changes in the Concentration of Wealth: An Overview of Recent Findings," WIDER Working Paper Series 103, World Institute for Development Economic Research (UNU-WIDER).
    5. Alvaredo, Facundo & Saez, Emmanuel, 2006. "Income and Wealth Concentration in Spain in a Historical and Fiscal Perspective," CEPR Discussion Papers 5836, C.E.P.R. Discussion Papers.
    6. Rolf Aaberge & Anthony B. Atkinson, 2008. "Top Incomes in Norway," Discussion Papers 552, Statistics Norway, Research Department.
    7. Thomas Piketty, 2003. "Income Inequality in France, 1901-1998," Journal of Political Economy, University of Chicago Press, vol. 111(5), pages 1004-1042, October.
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. The long-run history of income inequality in Denmark: Top incomes from 1870 to 2010
      by maximorossi in NEP-LTV blog on 2013-03-04 18:48:11

    Citations

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    Cited by:

    1. Kwame Sundaram, Jomo. & Popov, Vladimir., 2015. "Income inequalities in perspective," ILO Working Papers 994876503402676, International Labour Organization.
    2. Christoph Schinke, 2014. "Government Ideology, Globalization, and Top Income Shares in OECD Countries," ifo Working Paper Series 181, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    3. Popov, Vladimir, 2016. "Is Globalization Coming to an End Due to Rise of Income Inequalities?," MPRA Paper 73094, University Library of Munich, Germany.
    4. Edirisa Nseera, 2014. "Working Paper 206 - Growth and Distributional Impact of Agriculture, Textiles and Mining Sectors in Lesotho," Working Paper Series 2137, African Development Bank.
    5. repec:ilo:ilowps:487650 is not listed on IDEAS

    More about this item

    Keywords

    Income inequality; Income distribution; Wealth distribution; Top incomes; Taxation; Denmark;

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • N3 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy

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