Working Paper: CEPR ID: DP12799
Authors: Dina Bertrand Garbinti; Jonathan Goupille-Lebret; Thomas Piketty
Abstract: This paper presents "Distributional National Accounts" (DINA) for France. That is, we combine national accounts, tax and survey data in a comprehensive and consistent manner to build homogenous annual series on the distribution of national income by percentiles over the 1900-2014 period, with detailed breakdown by age, gender and income categories over the 1970-2014 period. Our DINA-based estimates allow for a much richer analysis of the long-run pattern found in previous tax-based series, i.e. a long-run decline in income inequality, largely due to a sharp drop in the concentration of wealth and capital income following the 1914-1945 capital shocks. First, our new series deliver higher inequality levels than the usual tax-based series for the recent decades, because the latter miss a rising part of capital income. Growth incidence curves look dramatically different for the 1950-1983 and 1983-2014 sub-periods. We also show that it has become increasingly difficult in recent decades to access top wealth groups with labor income only. Next, gender inequality in labor income declined in recent decades, albeit fairly slowly among top labor incomes E.g. female share among top 0.1% earners was only 12% in 2012 (vs. 7% in 1994 and 5% in 1970). Finally, we find that distributional changes can have large impact on comparisons of well-being across countries. E.g. average pre-tax income among bottom 50% adults is 30% larger in France than in the U.S., in spite of the fact that aggregate per adult national income is 30% smaller in France.
Keywords: income inequality; income distribution; national accounts
JEL Codes: E01; H2; D31; N34
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| long-run decline in income inequality in France from 1900 to 2014 (D31) | sharp drop in the concentration of wealth and capital income (E25) |
| sharp drop in the concentration of wealth and capital income (E25) | higher levels of inequality than traditional tax-based series (H29) |
| growth incidence curves differ dramatically between the periods of 1950-1983 and 1983-2014 (O41) | significant shift in the distribution of income growth (F62) |
| significant shift in the distribution of income growth (F62) | bottom 50% experiencing stagnation relative to the top earners (D31) |
| gender inequality in labor income has declined among top labor income earners (J70) | distributional changes impact international comparisons of well-being (F61) |
| average pretax income among the bottom 50 adults in France being significantly larger than in the US (D31) | lower aggregate per adult national income in France (J19) |