This paper summarizes the main findings of the recent studies that have constructed top income and wealth shares series over the century for a number of countries using tax statistics. Most countries experience a dramatic drop in top income shares in the first part of the century due to a precipitous drop in large wealth holdings during the wars and depression shocks. Top income shares do not recover in the immediate post war decades. However, over the last 30 years, top income shares have increased substantially in English speaking countries but not at all in continental Europe countries or Japan. This increase is due to an unprecedented surge in top wage incomes starting in the 1970s and accelerating in the 1990s. As a result, top wage earners have replaced capital income earners at the top of the income distribution in English speaking countries. We discuss the proposed explanations and the main questions that remain open.
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number
11955.
Length: Date of creation: Jan 2006 Date of revision: Handle: RePEc:nbr:nberwo:11955
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Find related papers by JEL classification: D3 - Microeconomics - - Distribution J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
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