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Extreme Inequality: Evidence From Brazil, India, the Middle-East, and South Africa

Author

Listed:
  • Lydia Assouad

    (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)

  • Lucas Chancel

    (IDDRI - Institut du Développement Durable et des Relations Internationales - Institut d'Études Politiques [IEP] - Paris)

  • Marc Morgan

    (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)

Abstract

This paper presents new findings about inequality dynamics in Brazil, India, the Middle East and South Africa from the World Wealth and Income Database (WID.world). We combine tax data, household surveys and national accounts in a systematic manner to produce estimates of the distribution of income, using concepts coherent with macroeconomic national accounts. We document an extreme level of inequality in these regions, with top 10% income shares above 50% of national income. These societies are characterized by a dual social structure, with an extremely rich group at the top, whose income levels are broadly comparable to their counterparts in high-income countries, and a much poorer mass of the population below top groups. We discuss the diversity of regional contexts and highlight two explanations for the levels observed: the historical legacy of social segregation and modern economic institutions and policies.

Suggested Citation

  • Lydia Assouad & Lucas Chancel & Marc Morgan, 2018. "Extreme Inequality: Evidence From Brazil, India, the Middle-East, and South Africa," Working Papers halshs-02798136, HAL.
    • Handle: RePEc:hal:wpaper:halshs-02798136
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-02798136
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    References listed on IDEAS

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    1. Lucas Chancel & Thomas Piketty, 2019. "Indian Income Inequality, 1922‐2015: From British Raj to Billionaire Raj?," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 65(S1), pages 33-62, November.
    2. Facundo Alvaredo & Anthony Atkinson & Lucas Chancel & Thomas Piketty & Emmanuel Saez & Gabriel Zucman, 2016. "Distributional National Accounts (DINA) Guidelines : Concepts and Methods used in WID.world," World Inequality Lab Working Papers halshs-02794308, HAL.
    3. Stephen P. Jenkins, 2017. "Pareto Models, Top Incomes and Recent Trends in UK Income Inequality," Economica, London School of Economics and Political Science, vol. 84(334), pages 261-289, April.
    4. Burkhauser, Richard V. & Herault, Nicolas & Jenkins, Stephen P. & Wilkins, Roger, 2016. "What Has Been Happening to UK Income Inequality since the Mid-1990s? Answers from Reconciled and Combined Household Survey and Tax Return Data," IZA Discussion Papers 9718, Institute of Labor Economics (IZA).
    5. Thomas Blanchet & Juliette Fournier & Thomas Piketty, 2022. "Generalized Pareto Curves: Theory and Applications," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 68(1), pages 263-288, March.
    6. Christoph Lakner & Branko Milanovic, 2016. "Global Income Distribution: From the Fall of the Berlin Wall to the Great Recession," The World Bank Economic Review, World Bank, vol. 30(2), pages 203-232.
    7. Marc Morgan, 2017. "Extreme and Persistent Inequality: New Evidence for Brazil Combining National Accounts, Surveys and Fiscal Data, 2001-2015," World Inequality Lab Working Papers halshs-02794605, HAL.
    8. Facundo Alvaredo & Thomas Piketty & Emmanuel Saez & Lucas Chancel & Gabriel Zucman, 2018. "World Inequality Report 2018," PSE-Ecole d'économie de Paris (Postprint) halshs-01885458, HAL.
    9. repec:iae:iaewps:wp2016n5 is not listed on IDEAS
    10. Piketty, Thomas & Chancel, Lucas, 2017. "Indian income inequality, 1922-2014: From British Raj to Billionaire Raj ?," CEPR Discussion Papers 12409, C.E.P.R. Discussion Papers.
    11. Facundo Alvaredo & Lucas Chancel & Thomas Piketty & Gabriel Zucman, 2018. "Distributional National Accounts," Post-Print halshs-03342488, HAL.
    12. Marc Morgan, 2017. "Extreme and Persistent Inequality: New Evidence for Brazil Combining National Accounts, Surveys and Fiscal Data, 2001-2015," Working Papers halshs-02794605, HAL.
    13. Facundo Alvaredo & Anthony B Atkinson, 2010. "Colonial Rule, Apartheid and Natural Resources: Top Incomes in South Africa 1903-2005," OxCarre Working Papers 046, Oxford Centre for the Analysis of Resource Rich Economies, University of Oxford.
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    Cited by:

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    2. Giacomo DiPasquale, 2022. "The Effects of International Immigration on Inequality in Host Countries: the Case of Italy," Journal of International Migration and Integration, Springer, vol. 23(4), pages 1793-1824, December.
    3. Anand Sahasranaman & Henrik Jeldtoft Jensen, 2021. "Dynamics of reallocation within India’s income distribution," Indian Economic Review, Springer, vol. 56(1), pages 1-23, June.
    4. Irarrázaval, Andrés, 2020. "The fiscal origins of comparative inequality levels: an empirical and historical investigation," LSE Research Online Documents on Economics 107491, London School of Economics and Political Science, LSE Library.
    5. Grégoire Rota-Graziosi & Islam Asif & Rabah Arezki, 2021. "Taming Private Leviathans : Regulation versus Taxation," Working Papers hal-03129746, HAL.
    6. Rabah Arezki & Asif Islam & Grégoire Rota-Graziosi, 2021. "Working Paper 350 - Taming Private Leviathans: Regulation versus Taxation," Working Paper Series 2476, African Development Bank.
    7. Ram Singh, 2022. "Do the Wealthy Underreport their Income? Analysing Relationship between Wealth and Reported Income in India," Working papers 331, Centre for Development Economics, Delhi School of Economics.
    8. Philip Arestis & Peter Phelps, 2019. "A panel analysis of Brazilian regional inequality," Environment and Planning A, , vol. 51(7), pages 1558-1585, October.
    9. Amory Gethin & Marc Morgan, 2021. "Democracy and the Politicization of Inequality in Brazil, 1989-2018," Working Papers halshs-03165718, HAL.
    10. Chancel, Lucas & Cogneau, Denis & Gethin, Amory & Myczkowski, Alix & Robilliard, Anne-Sophie, 2023. "Income inequality in Africa, 1990–2019: Measurement, patterns, determinants," World Development, Elsevier, vol. 163(C).
    11. Mehmet Balcilar & Rangan Gupta & Wei Ma & Philton Makena, 2021. "Income inequality and economic growth: A re‐examination of theory and evidence," Review of Development Economics, Wiley Blackwell, vol. 25(2), pages 737-757, May.
    12. Folharini, Saulo de Oliveira & Melo, Silas Nogueira de & Ramos, Rafael Guimarães & Brown, J. Christopher, 2023. "Land use and green crime: Assessing the edge effect," Land Use Policy, Elsevier, vol. 129(C).
    13. Jonathan Rothwell, 2019. "The Political Economy of Inequality in Rich Democracies," LIS Working papers 772, LIS Cross-National Data Center in Luxembourg.
    14. Joel Henrique Ellwanger & Carlos Afonso Nobre & José Artur Bogo Chies, 2022. "Brazilian Biodiversity as a Source of Power and Sustainable Development: A Neglected Opportunity," Sustainability, MDPI, vol. 15(1), pages 1-16, December.
    15. Assouad, Lydia, 2023. "Rethinking the Lebanese economic miracle: The extreme concentration of income and wealth in Lebanon, 2005–2014," Journal of Development Economics, Elsevier, vol. 161(C).
    16. Anand Sahasranaman & Henrik Jeldtoft Jensen, 2019. "Dynamics of reallocation within India's income distribution," Papers 1909.04452, arXiv.org, revised Oct 2020.
    17. Irarrázaval, Andrés, 2020. "The fiscal origins of comparative inequality levels: an empirical and historical investigation," Economic History Working Papers 107491, London School of Economics and Political Science, Department of Economic History.
    18. Bradlow, Benjamin H., 2024. "Urban social movements and local state capacity," World Development, Elsevier, vol. 173(C).
    19. Giorgio d'Agostino & Francesco Giuli & Marco Lorusso & Margherita Scarlato, 2020. "Fiscal policy, labour market, and inequality: Diagnosing South Africa's anomalies in the shadow of racial discrimination," WIDER Working Paper Series wp-2020-122, World Institute for Development Economic Research (UNU-WIDER).

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    More about this item

    Keywords

    DINA; Distributional National Accounts; Inequality; Brazil; India; Middle-East; South Africa; data; measurement; tax data; fiscal data;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

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