Sunday, May 4, 2014

Exceptionalism at the top

Almost everyone who's been paying attention agrees that over the last 30-40 years, the share of total income going to people near the top (say the top 1%) has been increasing.  It's also pretty widely agreed that this trend has been stronger in the  United States than in most other countries.  But it's not clear exactly how big the national differences are.  The World Top Incomes database gives data for a number of countries, but the range of dates varies, many countries have missing observations, and there's a good deal of short-term variation, so it's difficult to get a simple summary.  This is a first attempt.

There are nineteen nations in the World Top Incomes database that have data going back to the 1970s.  This figure shows the average share of the top one percent (adjusted for differences in the nations included in particular years).  It declined from 1970 to the early 1980s, and then increased.  The big jump in 2012 is probably not meaningful, since it's based on only one or two nations.

I then calculated a linear trend for each country adjusted for these differences.  Adjusting is important, because otherwise estimates of trends would be distorted by the particular years for which data were available:  e. g., an "average" country for which the data began in 1985 would seem to have faster growth than one for which the data began in 1970.   The rankings, taking the United States as the standard of comparison:

 0.00000 US
-0.10722 UK
-0.16061 Ireland
-0.16574 Norway
-0.16977 Portugal
-0.17165 Australia
-0.19644 Singapore
-0.21934 New Zealand
-0.23355 Italy
-0.24485 Japan
-0.25075 Sweden
-0.27085 Germany
-0.27659 Switzerland
-0.28545 France
-0.30242 Netherlands
-0.32016 Finland
-0.33291 Spain
-0.33960 Denmark
-0.38576 Mauritius

The United States is #1, but it's not a simple case of the United States versus everyone else--there are substantial differences among the other countries.

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