NEW: Predistribution vs. Redistribution: Evidence from France and the U.S., with Antoine Bozio, Bertrand Garbinti, Malka Guillot, and Thomas Piketty, CEPR DP15415
Abstract: How much redistribution policies can account for long-run changes in inequality? To answer this question, we quantify the extent of redistribution over time by the percentage reduction from pretax to post-tax inequalities, and decompose the changes in post-tax inequalities into different redistributive policies and changes in pretax inequalities. To estimate these redistributive statistics, we construct homogenous annual series of post-tax national income for France over the 1900-2018 period, and compare them with those recently constructed for the U.S. We obtain three major findings. First, redistribution has increased in both countries over the period, earlier in the U.S., later in France, to reach similar levels today. Second, the substantial long-run decline in post-tax inequality in France over the 1900-2018 period is due mostly to the fall in pretax inequality (accounting for three quarters of the total decline), and to a lesser extent to the direct redistributive role of taxes, transfers and other public spending (about one quarter). Third, the reason why overall inequality is much smaller in France than in the U.S. is entirely due to differences in pretax inequality. These findings suggest that policy discussions on inequality should, in the future, pay more attention to policies affecting pretax inequality and should not focus exclusively on “redistribution”. [Old 2018 WP]
FINAL: Accounting for Wealth Inequality Dynamics: Methods, Estimates and Simulations for France, with Bertrand Garbinti and Thomas Piketty. Accepted to the Journal of the European Economic Association. Appendix
Abstract: Measuring and understanding the evolution of wealth inequality is a key challenge for researchers, policy makers, and the general public. This paper breaks new ground on this topic by presenting a new method to estimate and study wealth inequality. This method combines fiscal data with household surveys and national accounts in order to provide annual wealth distribution series, with detailed breakdowns by percentiles, age and assets. Using the case of France as an illustration, we show that the resulting series can be used to better analyze the evolution and the determinants of wealth inequality dynamics over the 1970-2014 period. We show that the decline in wealth inequality ends in the early 1980s, marking the beginning of a rise in the top 1% wealth share, though with significant fluctuations due largely to asset price movements. Rising inequality in saving rates coupled with highly stratified rates of returns has led to rising wealth concentration in spite of the opposing effect of house price increases. We develop a simple simulation model highlighting how changes in the combination of unequal saving rates, rates of return and labor earnings that occurred in the early 1980s generated large multiplicative effects that led to radically different steady-state levels of wealth inequality. Taking advantage of the joint distribution of income and wealth, we show that top wealth holders are almost exclusively top capital earners, and less and less are made up of top labor earners; it has become increasingly difficult in recent decades to access top wealth groups with one’s labor income only.
Behavioral Responses to Inheritance Tax: Evidence from Notches in France, with Arturo Infante, Journal of Public Economics, 2018, 168: 21-34. Abstract.
Income Inequality in France, 1900-2014: Evidence from Distributional National Accounts (DINA), with Bertrand Garbinti and Thomas Piketty, Journal of Public Economics, 2018, 162: 63-77. Abstract
Applying Generalized ParetoCurves to Inequality Analysis, with Thomas Blanchet, Bertrand Garbinti and Clara Martinez Toledano, American Economic Association Papers and Proceedings, 2018, 108: 114–118. Abstract.
The Impact of Inheritance and Transfer Taxation on Economic Behaviors and Inequality: a Literature Review for France, with Bertrand Garbinti, Ifo DICE Report 2/2018 (June): 13-18, 2018.
Articles in French:
Inégalités de revenus et de richesse en France : Evolutions et liens sur longue période, avec Bertrand Garbinti, Economie et Statistique/Economics and Statistics, 2019, 510-511-512, 69–87. [English version]
Combien ont coûté les réformes de l’impôt sur les successions mises en place en France depuis 2000 ?, [Inheritance tax reforms in France: How much did they cost since 2000?], Revue économique, 2016, 67(4), p. 913-936.
Impact des droits de succession sur le comportement d'accumulation du patrimoine, avec Arturo Infante, Revue française d'économie, 2016/1 (Volume XXXI), p. 187-206.
Dissemination of scientific knowledge:
Income inequality in France: Economic growth and the gender gap, VoxEU, with Bertrand Garbinti and Thomas Piketty.
The evolution of wealth inequality in France from 1800 to 2014, Rue de la Banque, 2018, with Bertrand Garbinti.
Trois decennies d’inégalités et de redistribution en France (1990-2018), Note WIL-IPP, 2018, avec Antoine Bozio , Bertrand Garbinti, Malka Guillot et Thomas Piketty.
Inégalités de patrimoine en France : quelles évolutions de 1800 à 2014 ?, Rue de la Banque, Variances, 2018, avec Bertrand Garbinti.
Inégalité de revenus et de patrimoine : l’envolée récente des très hauts patrimoines et revenus, avec Bertrand Garbinti, Cahier Français, No. 400, 2017.
Fiscalité et redistribution en France, 1997-2012, [TAXIPP analyses 15 years of tax policies in France], avec Antoine Bozio, Roy Dauvergne, Brice Fabre et Olivier Meslin, Rapport IPP, No. 1, mars 2012.