Detecting Historical Inequality Patterns: A Replication of Thomas Piketty’s Wealth Concentration Estimates for the United Kingdom

Abstract

This article utilizes a replication exercise to evaluate the reliability of the historical time series for top income share concentrations in the United Kingdom, as presented in Thomas Piketty’s Capital in the Twenty First Century (2014). Piketty’s depiction of the top 1% and 10% wealth shares for 1910 to 2010 is compared against both his source data and subsequent improvements by other scholars. Piketty’s time series is shown to diverge substantially from each, and does not appear to be replicable. In particular, Piketty introduces a sizable post-1980 adjustment that suggests a substantially more rapid acceleration of wealth concentration than its source statistics reveal. Issues of reliability in the U.K. time series mirror similar problems with Piketty’s wealth estimates for the United States, although their implications for historical interpretation differ in light of subsequent data. These findings indicate that Piketty’s historical account of changing wealth concentrations in the United Kingdom in the 20th century is unreliable. An alternative interpretation of the source data is therefore offered, pointing to a century long L-shaped pattern in place of Piketty’s depicted U-curve.

Keywords: Inequality, Wealth Concentration, Economic History of the United Kingdom, Replication

JEL Classification: N14, D63