Crisis Without Convergence - Income distribution in Stockholm during the Great Depression

This paper revisits the role of the Great Depression as a driver of income leveling, using new evidence on Stockholm’s income distribution between 1926 and 1936. Drawing on previously unexploited Swedish Tax Assessment Calendars and official tabulated tax data, the study generates detailed estimates of income shares across the distribution. Contrary to conventional narratives portraying financial crises as powerful equalizers, the Gini coefficient in Stockholm remained stable throughout the Depression, despite a moderately severe domestic financial crisis. While the top 1 percent income share declined modestly, the lower half of the distribution saw no relative improvement. These findings challenge the interpretation of the Great Depression as a major “leveling event” in Sweden by downplaying its immediate distributive effects and instead pointing toward the importance of fundamental political and structural transformations that were not driven by the crisis itself. The results underscore the ambiguous relationship between financial crises and inequality, offering a historical perspective relevant to contemporary debates beyond Sweden.