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The Evolution of Top Incomes in Switzerland over the 20th Century

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  • Christoph A. Schaltegger
  • Christoph Gorgas

Abstract

We study the income concentration in the Swiss federation over the course of the 20th century using federal income tax statistics. The results suggest that top incomes in Switzerland evolved over time rather remaining constant across different income shares. Income concentration peaked during the 1940s, with a slight downward trend until the 1990s. Over the last 15 years, top incomes have recovered. In contrast, the evolution of income concentration is much more heterogeneous on the sub-federal level for the 26 cantons because of the federalist constitution, which has a decentralized taxing power. Consequently, top incomes in some cantons have a downward trend; others show a fall and rise of top incomes over the century, as exemplified by the Kuznets' hypothesis; some develop rather constantly; and some cantons even produce a striking upward trend.

Suggested Citation

  • Christoph A. Schaltegger & Christoph Gorgas, 2011. "The Evolution of Top Incomes in Switzerland over the 20th Century," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 147(IV), pages 479-519, December.
    • Handle: RePEc:ses:arsjes:2011-iv-7
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    Cited by:

    1. Foellmi, Reto & Martínez, Isabel Z., 2014. "Volatile Top Income Shares in Switzerland? Reassessing the Evolution Between 1981 and 2009," CEPR Discussion Papers 10006, C.E.P.R. Discussion Papers.
    2. Frey, Christian & Schaltegger, Christoph A., 2016. "Progressive taxes and top income shares: A historical perspective on pre- and post-tax income concentration in Switzerland," Economics Letters, Elsevier, vol. 148(C), pages 5-9.
    3. Reto Foellmi & Isabel Z. Martínez, 2017. "Volatile Top Income Shares in Switzerland? Reassessing the Evolution between 1981 and 2010," The Review of Economics and Statistics, MIT Press, vol. 99(5), pages 793-809, December.
    4. Stadelmann, David & Portmann, Marco & Eichenberger, Reiner, 2015. "Income and policy choices: Evidence from parliamentary decisions and referenda," Economics Letters, Elsevier, vol. 135(C), pages 117-120.
    5. Christian Frey & Christoph Gorgas & Christoph A. Schaltegger, 2017. "The Long Run Effects of Taxes and Tax Competition on top Income Shares: An Empirical Investigation," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 63(4), pages 792-820, December.
    6. Feld, Lars P. & Frey, Christian & Schaltegger, Christoph A. & Schmid, Lukas A., 2021. "Fiscal federalism and income inequality: An empirical analysis for Switzerland," Journal of Economic Behavior & Organization, Elsevier, vol. 185(C), pages 463-494.
    7. Gathmann, Christina, 2019. "Proportional Representation, Political Responsiveness and Child Mortality," IZA Discussion Papers 12729, Institute of Labor Economics (IZA).
    8. Christoph Gorgas & Christoph A. Schaltegger, 2012. "The long run effect of taxes on the distribution of top income shares: an empirical investigation," CREMA Working Paper Series 2012-22, Center for Research in Economics, Management and the Arts (CREMA).
    9. Fretz Stephan & Gorgas Christoph, 2015. "Regionaler Nutzen von Verkehrsinfrastruktur-Erweiterungen: Evidenz vom Schweizer Autobahnnetz," Perspektiven der Wirtschaftspolitik, De Gruyter, vol. 16(1), pages 57-71, March.
    10. Christoph A. Schaltegger & Christoph Gorgas, 2014. "Wie entwickelt sich die Schweizer Mittelschicht?," CREMA Working Paper Series 2014-11, Center for Research in Economics, Management and the Arts (CREMA).

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    More about this item

    Keywords

    Income inequality; Top incomes; Taxation;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • N3 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy

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