Common Trends and Shocks to Top Incomes: A Structural Breaks Approach

Reprint No. 2011:24

Author(s): Jesper Roine and Daniel WaldenströmYear: 2011 Title: Review of Economics and Statistics Volume (No.): 93 (3) Pages: 832–846
Online article (restrictions may apply)

We use newly compiled top income data and structural breaks techniques to estimate common trends and breaks in inequality across countries over the twentieth century. Our results both confirm earlier findings and offer new insights. In particular, the division into an Anglo- Saxon and a Continental European experience is not as clear-cut as previously suggested. Some Continental European countries seem to have, experienced increases in top income shares, just as Anglo-Saxon countries have, but typically with a lag. Most notably, Nordic countries display a marked Anglo-Saxon pattern, with sharply increased top income shares, especially when including realized capital gains. Our results help inform theories about the causes of the recent rise in inequality.

Roine, Jesper and Daniel Waldenström (2011), "Common Trends and Shocks to Top Incomes: A Structural Breaks Approach". Review of Economics and Statistics 93(3), 832–846.

Daniel Waldenström


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In this book Andreas Bergh, Therese Nilsson, IFN and Lund University, and Daniel Waldenström, IFN and Paris School of Economics, France, review the latest research on the relationship between inequality and health. What does inequality mean for our health? Does increasing income inequality affect outcomes such as obesity, life expectancy and subjective well-being?


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