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Predistribution vs. Redistribution: Evidence from France and the U.S

Author

Listed:
  • Antoine Bozio

    (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

  • Bertrand Garbinti

    (CREST - Centre de Recherche en Économie et Statistique - ENSAI - Ecole Nationale de la Statistique et de l'Analyse de l'Information [Bruz] - X - École polytechnique - IP Paris - Institut Polytechnique de Paris - ENSAE Paris - École Nationale de la Statistique et de l'Administration Économique - CNRS - Centre National de la Recherche Scientifique, ENSAE - Ecole Nationale de la Statistique et de l'Analyse Economique - Ecole Nationale de la Statistique et de l'Analyse Economique)

  • Jonathan Goupille-Lebret

    (GATE Lyon Saint-Étienne - Groupe d'Analyse et de Théorie Economique Lyon - Saint-Etienne - UL2 - Université Lumière - Lyon 2 - UJM - Université Jean Monnet - Saint-Étienne - EM - EMLyon Business School - CNRS - Centre National de la Recherche Scientifique, ENS de Lyon - École normale supérieure de Lyon, CEPR - Center for Economic Policy Research, CESifo - CESifo)

  • Malka Guillot

    (Université de Liège)

  • Thomas Piketty

    (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

Abstract

We construct series of post-tax income for France over the 1900–2018 period and compare them with U.S. series. We quantify the extent of redistribution—the reduction from pretax to post-tax inequality—and estimate the contribution of redistribution in explaining differences in post-tax inequality. We find that differences in pretax inequality drive most of the differences in post-tax inequality between France and the U.S., and that changes over time in both countries are mostly due to changes in pretax inequality. We highlight that the concept of redistribution can be empirically misleading for judging how policies reduce inequalities. Policies which reduce pretax inequality, i.e., predistribution, will reduce the magnitude of redistribution, while still reducing effectively post-tax inequality. This suggests that more attention should be paid to policies affecting pretax inequality.

Suggested Citation

  • Antoine Bozio & Bertrand Garbinti & Jonathan Goupille-Lebret & Malka Guillot & Thomas Piketty, 2024. "Predistribution vs. Redistribution: Evidence from France and the U.S," Post-Print halshs-04353086, HAL.
    • Handle: RePEc:hal:journl:halshs-04353086
    as

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