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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

    as
    1. Atkinson, A. B. & Piketty, Thomas (ed.), 2010. "Top Incomes: A Global Perspective," OUP Catalogue, Oxford University Press, number 9780199286898, April.
    2. 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.
    3. A. B. Atkinson, 2005. "Top incomes in the UK over the 20th century," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 168(2), pages 325-343, March.
    4. 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.
    5. 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.
    6. Henry Ohlsson & Jesper Roine & Daniel Waldenstrom, 2006. "Long-Run Changes in the Concentration of Wealth: An Overview of Recent Findings," WIDER Working Paper Series RP2006-103, World Institute for Development Economic Research (UNU-WIDER).
    7. 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.
    8. Anthony Atkinson & Thomas Piketty, 2010. "Top Incomes : A Global Perspective," PSE-Ecole d'économie de Paris (Postprint) halshs-00754875, HAL.
    9. Anthony Atkinson & Thomas Piketty, 2007. "Top incomes over the twentieth century: A contrast between continental european and english-speaking countries," Post-Print halshs-00754859, HAL.
    10. Rolf Aaberge & Anthony B. Atkinson, 2008. "Top Incomes in Norway," Discussion Papers 552, Statistics Norway, Research Department.
    11. Davies, James B. (ed.), 2008. "Personal Wealth from a Global Perspective," OUP Catalogue, Oxford University Press, number 9780199548897, April.
    12. Thomas Piketty, 2003. "Income Inequality in France, 1901-1998," Journal of Political Economy, University of Chicago Press, vol. 111(5), pages 1004-1042, October.
    13. Atkinson, A. B. & Piketty, Thomas (ed.), 2007. "Top Incomes Over the Twentieth Century: A Contrast Between Continental European and English-Speaking Countries," OUP Catalogue, Oxford University Press, number 9780199286881, April.
    Full references (including those not matched with items on IDEAS)

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    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. 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.
    2. Popov, Vladimir, 2018. "Why Some Countries Have More Billionaires Than Others? (Explaining Variations in Billionaire Intensity of GDP)," MPRA Paper 87119, University Library of Munich, Germany.
    3. Abildgren, Kim, 2016. "The National Wealth of Denmark 1845-2013 in a European Perspective," Nationaløkonomisk tidsskrift, Nationaløkonomisk Forening, vol. 2016(1), pages 1-19.
    4. Bartels, Charlotte & Jenderny, Katharina, 2014. "The role of capital income for top incomes shares in Germany," Discussion Papers 2014/32, Free University Berlin, School of Business & Economics.
    5. Kwame Sundaram, Jomo. & Popov, Vladimir., 2015. "Income inequalities in perspective," ILO Working Papers 994876503402676, International Labour Organization.
    6. 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.
    7. Katarzyna Kalinowska, 2021. "Opportunities and Threats Related to the Implementation of the So-Called Third Way Concept," European Research Studies Journal, European Research Studies Journal, vol. 0(Special 4), pages 288-299.
    8. Anjan K. Saha & Vinod Mishra & Russell Smyth, 2021. "Financial development and top income shares in OECD countries," Southern Economic Journal, John Wiley & Sons, vol. 87(3), pages 952-978, January.
    9. Atanu Ghoshray & Issam Malki & Javier Ordóñez, 2020. "Trends, Breaks and Persistence in Top Income Shares," Working Papers 2020/12, Economics Department, Universitat Jaume I, Castellón (Spain).
    10. Popov, Vladimir, 2014. "Socialism is dead, long live socialism!," MPRA Paper 54294, University Library of Munich, Germany.
    11. Facundo Alvaredo & Anthony B. Atkinson & Thomas Piketty & Emmanuel Saez, 2013. "The Top 1 Percent in International and Historical Perspective," Journal of Economic Perspectives, American Economic Association, vol. 27(3), pages 3-20, Summer.
    12. repec:ilo:ilowps:487650 is not listed on IDEAS
    13. Popov, Vladimir, 2016. "Is Globalization Coming to an End Due to Rise of Income Inequalities?," MPRA Paper 73094, University Library of Munich, Germany.

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    More about this item

    Keywords

    Income inequality; Income distribution; Wealth distribution; Top incomes; Taxation; Denmark;
    All these keywords.

    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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