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Public Economics and Inequality: Uncovering Our Social Nature


  • Emmanuel Saez


This paper argues that the social nature of humans, absent from the standard economic model, is crucial to understand our large modern social states and why concerns about inequality are so pervasive. A social solution arises when a situation is resolved at the group level (rather than the individual level) through cooperation and fair distribution of the resulting surplus. In human societies, childcare and education for the young, retirement benefits for the old, health care for the sick, and income support for those in need, is resolved at the social level, and through the social state in advanced economies. Social situations are pervasive even outside government and play a significant role in the distribution of pre-tax market incomes.

Suggested Citation

  • Emmanuel Saez, 2021. "Public Economics and Inequality: Uncovering Our Social Nature," NBER Working Papers 28387, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:28387
    Note: PE

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    Cited by:

    1. Bental, Benjamin & Kragl, Jenny, 2021. "Inequality and incentives with societal other-regarding preferences," Journal of Economic Behavior & Organization, Elsevier, vol. 188(C), pages 1298-1324.
    2. Bíró, Anikó & Prinz, Dániel & Sándor, László, 2022. "The minimum wage, informal pay, and tax enforcement," Journal of Public Economics, Elsevier, vol. 215(C).
    3. Thomas Piketty & Emmanuel Saez & Gabriel Zucman, 2022. "Twenty Years and Counting: Thoughts about Measuring the Upper Tail," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 20(1), pages 255-264, March.
    4. Marko Ledić & Ivica Rubil & Ivica Urban, 2023. "Tax progressivity and social welfare with a continuum of inequality views," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 30(5), pages 1266-1296, October.
    5. Benoît Walraevens, 2023. "Ideologies and Utopia: A Ricoeurian Reading of Thomas Piketty," Post-Print hal-04195650, HAL.
    6. Benoît Walraevens, 2021. "The triumph of injustice. Wealth, tax evasion and democracy [Inégalités économiques, justice fiscale et démocratie aux USA]," Post-Print hal-03554121, HAL.
    7. Arash Nekoei, 2022. "Will Markets Provide Humane Jobs? A Hypothesis," CESifo Working Paper Series 9533, CESifo.

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    JEL classification:

    • H0 - Public Economics - - General

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