The Evolution of Top Incomes: A Historical and International Perspective

16 Pages Posted: 13 Apr 2006 Last revised: 2 Sep 2010

See all articles by Thomas Piketty

Thomas Piketty

National Center for Scientific Research (CNRS) - Centre d'Etudes Prospectives d'Economie Mathematique Appliquees a la Planification (CEPREMAP); Centre for Economic Policy Research (CEPR)

Emmanuel Saez

University of California, Berkeley - Department of Economics; National Bureau of Economic Research (NBER)

Date Written: January 2006

Abstract

This paper summarizes the main findings of the recent studies that have constructed top incomeand wealth shares series over the century for a number of countries using tax statistics. Most countries experience a dramatic drop in top income shares in the first part of the century due to a precipitous drop in large wealth holdings during the wars and depression shocks. Top income shares do not recover in the immediate post war decades. However, over the last 30 years, top income shares have increased substantially in English speaking countries but not at all in continental Europe countries or Japan. This increase is due to an unprecedented surge in top wage incomes starting in the 1970s and accelerating in the 1990s. As a result, top wage earners have replaced capital income earners at the top of the income distribution in English speaking countries. We discuss the proposed explanations and the main questions that remain open.

Suggested Citation

Piketty, Thomas and Saez, Emmanuel, The Evolution of Top Incomes: A Historical and International Perspective (January 2006). NBER Working Paper No. w11955. Available at SSRN: https://ssrn.com/abstract=877460

Thomas Piketty

National Center for Scientific Research (CNRS) - Centre d'Etudes Prospectives d'Economie Mathematique Appliquees a la Planification (CEPREMAP) ( email )

Ecole Normale Superieure
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75014 Paris
France
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HOME PAGE: http://pythie.cepremap.ens.fr/~piketty/

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Emmanuel Saez (Contact Author)

University of California, Berkeley - Department of Economics ( email )

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Berkeley, CA 94720-3880
United States
510-642-4631 (Phone)
510-642-6615 (Fax)

National Bureau of Economic Research (NBER)

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Cambridge, MA 02138
United States

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