Essays on Inequality and Fiscal Policy
Thesis: This dissertation comprises five chapters on inequality and fiscal policy. Chapter 1 builds and analyzes a new global database of effective tax rates on capital and labor, and establishes a new stylized fact: while effective capital tax rates have fallen since 1965 in developed countries, in developing countries they have recently risen. In many countries, globalization appears to have supported governments’ability to tax capital. In Chapter 2, data on public expenditures complement the Chapter 1 data on tax revenues, and we estimate the incidence of both along comprehensive pretax national income distributions, worldwide since 1980. We find that redistribution rises with development, but this is entirely due to transfers; tax progressivity is uncorrelated with per capita income. Redistribution has increased in most world regions, except in Africa and Eastern Europe, where it has stagnated. Shifting gears from worldwide estimates to single-country studies, Chapter 3 examines the midcentury decline in inequality in the United States of America. New attention to archival data reveals that the decline in inequality favored the middle class more than the working poor—with one exception: Midcentury wage compression lasted for the entire postwar era. I explain one generation-defining trend with another, and demonstrate the causal impact of World War II service on postwar wages, particularly for those at the bottom of the wage distribution. The fourth chapter estimates of the full distribution of all national income in Australia for the period 1991 to 2018, and find that in fact inequality of post-tax national income is lower and increased less than inequality of survey-based (post-transfer, disposable) income between 1991 and 2018. Australian inequality is much lower than that of the United States, and similar to that of France, with those at the bottom of the income distribution faring noticeably better in France and Australia than in the US. Finally, in Chapter 5, we estimate pre- and post-tax income distributions for Canada and its provinces from 1982 to 2021. Since the mid-2000s, income inequality has decreased slightly although it remains far above the levels observed in the early 1980s. Across Canadian provinces, Ontario has consistently had higher inequality than Quebec although the gap has closed in recent years. Quebec has the most progressive tax and transfer system. During the pandemic, post-tax income inequality initially fell with large temporary transfer programs, but pre-tax income inequality has increased since then.
Keywords
- Public economics
- Economic History
- Development economics
Issuing body(s)
- EHESS (École des Hautes Études en Sciences Sociales
Date of defense
- 02/12/2024
Thesis director(s)
- Facundo Alvaredo
Pages
- 341 p.
URL of the HAL notice
Version
- 1