Working Paper: NBER ID: w11511
Authors: Edward L. Glaeser
Abstract: This paper reviews five striking facts about inequality across countries. As Kuznets (1955) famously \nfirst documented, inequality first rises and then falls with income. More unequal societies are much \nless likely to have democracies or governments that respect property rights. Unequal societies have \nless redistribution, and we have little idea whether this relationship is caused by redistribution \nreducing inequality or inequality reducing redistribution. Inequality and ethnic heterogeneity are \nhighly correlated, either because of differences in educational heritages across ethnicities or because \nethnic heterogeneity reduces redistribution. Finally, there is much more inequality and less \nredistribution in the U.S. than in most other developed nations.
Keywords: No keywords provided
JEL Codes: J0
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Higher inequality (D31) | Less redistribution (D39) |
| Higher inequality (D31) | Reduced political influence of the poor (D72) |
| Ethnic heterogeneity (J15) | Less support for redistribution (D39) |
| Different political institutions (majoritarian vs. proportional representation) (D72) | Levels of redistribution (H23) |
| Higher inequality (D31) | Less redistribution (mediated by political power dynamics) (D39) |
| Ethnic heterogeneity (J15) | Political institutions impact on redistribution (P16) |