Wealth inequality in the long run

Abstract

: This chapter provides an overview of long-term changes in wealth inequality, measured as net marketable wealth, based on two measures: the Gini index and the wealth share of the richest 10%. The chapter relies on current databases such as the World Inequality Database (WID) but expands considerably the time series for a range of countries by building upon the most recent research and by producing new estimates. For five Western countries (France, Italy, Sweden, the United Kingdom and the United States) it has been possible to provide estimates covering the period from 1820 to 2010. However, for other Western countries as well as for other areas of the world, much more work is needed before we can assess long-term trends in wealth inequality. Our data confirm the general picture of a creeping increase in inequality during the 19th century, followed by declines from the onset of World War I (1914) until the 1960s, and in many (but not all) countries a new tendency towards higher inequality since the 1970s. An overview of possible explanations for such trends is provided. The correlation of wealth inequality with per capita GDP is found to be quite weak and not always positive, implying that higher wealth inequality cannot be considered a simple side effect of economic growth. Acknowledgements: We thank Peter Lindert, Livio Di Matteo, Salvatore Morelli and Giacomo Gabbuti for supplying us with some data on wealth inequality. This chapter received support from the European Research Council under the European Union’s Horizon 2020 Framework Program/ERC Grant agreement Mobility and Italy and Europe, 1300-1800 , as well as from the Luxembourg National Research