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Wealth, Elites and Tax Justice

 

Working papers

Faces of Inequality: a mixed methods approach to multidimensional inequalities
Ingrid Bleynat and Paul Segal
Working Paper 68

Faces of Inequality: a mixed methods approach to multidimensional inequalities

This paper presents a new mixed methods approach to measuring and understanding multidimensional inequalities, and applies it to new data for Mexico City. We incorporate quantitative and qualitative dimensions of inequality, integrating the concerns of both economists and sociologists. The method combines standard quantitative income gradients with two new ways of conceptualizing qualitative inequalities that relate to lived experiences, all based on the same underlying income distribution. First, we introduce the method of qualitative income gradients, or what we call inequalities of lived experience. These compare qualitative experiences in fields such as work, or health and education services, across the entire income distribution. Second, we describe lived experiences of inequality, which are experiences of social hierarchy, stigma, or domination, including those associated with categorical inequalities of gender or race. This portrayal of inequality combines the representativeness of quantitative approaches with the depth and nuance of qualitative analyses of lived experience and social relations.

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Social Mobility and Political Regimes: Intergenerational Mobility in Hungary,1949-2017
Pawel Bukowski, Gregory Clark, Attila Gáspár and Rita Pero
Working paper 67

Social Mobility and Political Regimes: Intergenerational Mobility in Hungary,1949-2017

This paper measures social mobility rates in Hungary 1949-2017, for upper class and underclass families, using surnames to measure social status. In these years there were two very different social regimes. The first was the Hungarian People’s Republic, 1949-1989, a Communist regime with an avowed aim of favouring the working class. Then the modern liberal democracy, 1989-2020, a free-market economy. We find five surprising things. First, social mobility rates were low for both upper- and lower-class families 1949- 2017, with an underlying intergenerational status correlation of 0.6-0.8. Second, social mobility rates under communism were the same as in the subsequent capitalist regime. Third, the Romani minority throughout both periods showed even lower social mobility rates. Fourth, the descendants of the noble class in Hungary in the eighteenth century were still significantly privileged in 1949 and later. And fifth, while social mobility rates did not change measurably during the transition, the composition of the political elite changed fast and sharply.

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The sociology of elites: a European stocktaking and call for collaboration.
Mike Savage and Johs Hjellbrekke (Eds.)
Working paper 58

The sociology of elites: a European stocktaking and call for collaboration.

The aim of this working paper is to provide a stocktaking of major sociological interventions in elite research over the past decade, as a means of providing a comprehensive account of what has been achieved so far by numerous research teams (see also Heilbron 2017). This stocktaking is designed to clear a platform for the more important work of developing a methodology and perspective for comparative sociological analysis of elite formation going forward. It is hoped therefore that this working paper will be a valuable resource for anyone wishing to find a systematic bibliography to recent sociological research on elites. 

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Investigating the gender wealth gap across occupational classes.
Nora Waitkus and Lara Minkus
Working paper 56

Investigating the gender wealth gap across occupational classes.

This study examines the role of occupational class in the Gender Wealth Gap (GWG). Despite rising interest in gender differences in wealth, the central role of occupations in restricting and enabling its accumulation has received less scrutiny thus far. Drawing on the German Socio-economic Panel, we employ quantile regressions and decomposition techniques. We find explanatory power of occupational class for the gender wealth gap, which operates despite accounting for other labour-market-relevant parameters, such as income, tenure, and full-time work experience at all points of the wealth distribution. Wealth gaps by gender vary between and within occupational classes. Particularly, women's under-representation among the self-employed and over-representation among socio-cultural professions explain the GWG. Our study thus adds another dimension of stratification - occupational class - to the discussion of the gendered distribution of wealth.

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The economic consequences of major tax cuts for the rich. 
David Hope and Julian Limberg
Working paper 55

The economic consequences of major tax cuts for the rich

This paper uses data from 18 OECD countries over the last five decades to estimate the causal effect of major tax cuts for the rich on income inequality, economic growth, and unemployment. First, we use a new encompassing measure of taxes on the rich to identify instances of major reduction in tax progressivity. Then, we look at the causal effect of these episodes on economic outcomes by applying a nonparametric generalization of the difference-in-differences indicator that implements Mahalanobis matching in panel data analysis. We find that major reforms reducings taxes on the rich lead to higher income inequality as measured by the top 1% share of pre-tax national income. The effect remains stable in the medium term. In contrast, such reforms do not have any significant effect on economic growth and unemployment.

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Elites and Inequality A Case Study of Plutocratic Philanthropy in the UK
Luna Glucksberg and Louise Russell-Prywata
Working paper 49

Elites and inequality: a case study of plutocratic philanthropy in the UK

This paper investigates the role of elite philanthropy in the context of rising global inequality, asking whether large-scale philanthropic donations by elites are well placed to help tackle structural inequality. The challenges posed by such “plutocratic philanthropy” are explored through analysis of a network of the top 30 philanthropists in the United Kingdom and their connections to businesses and foundations, which shows their financial scale and connectivity. This new data is embedded into a review of the most recent social science literature on elites, which focuses on elite reproduction, how wealthy families perceive inequality, and how and why they engage in philanthropic activities. From this data, the paper develops an analysis of the current landscape of inequality, based on the work of British sociologist Mike Savage (2015), arguing that elite philanthropy as an ecosystem— made up of capital, people and institutions—is not well placed to systemically challenge inequalities, because the financial size of elites’ philanthropy tends to be dwarfed by their business activities, and the social functions of philanthropy help maintain the advantaged positions of elites. The paper concludes with informed policy considerations on the role of elite philanthropy in light of the results of the analysis.

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Managing racism? Race equality and decolonial educational futures
Suki Ali
Working paper 47

Managing racism? Race equality and decolonial educational futures

The Office for Students is now holding UK universities to account for their failures to address racial inequalities, and the Teaching Excellence Framework is bringing the student experience to the fore in assessing higher education institutions. As the twin crises of Covid- 19 and the murder of George Floyd have highlighted in an unprecedented way, racial inequalities and injustices persist in spite of decades of legislation aiming to promote equality and end discrimination. The paper considers two main areas of ‘racial equalities’ work, namely anti-racist initiatives and decolonial initiatives. It suggests that the rise of managerialism and in particular, audit cultures, have allowed racism to flourish in spite, or rather because of, the need to account for equality, diversity and inclusion in global markets for higher education. Auditing requires a focus on identities, and cannot take into account the complex ways in which race, race thinking and racism are maintained in knowledge production. The lack of consensus around what decolonial education should be undermines attempts to produce educational social justice. From a feminist postcolonial perspective, the paper suggests that recentralising racism and reengaging difference as a way to negotiate more just educational futures.

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Inequality, living standards and growth: two centuries of economic development in Mexico
Ingrid Bleynat, Amílcar Challú and Paul Segal
Working paper 46

Inequality, living standards and growth: two centuries of economic development in Mexico

Historical wage and incomes data are informative both as normative measures of living standards, and as indicators of patterns of economic development. We show that, given limited historical data, median incomes are most appropriate for measuring welfare and inequality, while urban unskilled wages can be used to test dualist models of development. We present a new dataset including both series in Mexico from 1800 to 2015 and find that both have historically failed to keep up with aggregate growth: per worker GDP is now over eight times higher than in the nineteenth century, while unskilled urban real wages are only 2.2 times higher, and median incomes only 2.0 times. From the perspective of inequality and social welfare, our findings confirm that there is no automatic positive relationship between economic growth and rising living standards for the majority. From the perspective of development, we argue that these findings are consistent with a dual economy model based on Lewis’s assumption of a reserve army of labour, and explain why Kuznets's predicted decline in inequality has not occurred.

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Inequality as Entitlements over Labour
Paul Segal
Working paper 43

Inequality as Entitlements over Labour

The modern study of economic inequality is based on the distribution of entitlements over goods and services. But social commentators at least since Rousseau have been concerned with a different aspect of economic inequality: that it implies that one person is entitled to command another person for their own personal ends. I call this inequality as entitlements over labour. I propose to measure entitlements over labour by calculating the extent to which top income groups can afford to buy the labour of others for the purpose of their personal consumption. Unlike standard inequality measures, this measure is not welfarist, but instead has its normative basis in relations of domination, hierarchy and social status between people. I estimate entitlements over labour in three high-inequality and two low-inequality countries and argue that inequality as entitlements over labour is socially and politically salient, capturing a side of inequality neglected by standard measures. 

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How the Reification of Merit Breeds Inequality: Theory and Experimental Evidence
Fabien Accominotti and Daniel Tadmon
Working paper 42

How the Reification of Merit Breeds Inequality: Theory and Experimental Evidence

In a variety of social contexts, measuring merit or performance is a crucial step toward enforcing meritocratic ideals. At the same time, workable measures – such as ratings – are bound to obfuscate the intricacy inherent to any empirical occurrence of merit, thus reifying it into an artificially crisp and clear-cut thing. This article explores how the reification of merit breeds inequality in the rewards received by the winners and losers of the meritocratic race. It reports the findings of a large experiment (n = 2,844) asking participants to divide a year- end bonus among a set of employees based on the reading of their annual performance reviews. In the experiment’s non-reified condition, reviews are narrative evaluations. In the reified condition, the same narrative evaluations are accompanied by a crisp rating of the employees’ performance. We show that participants reward employees more unequally when performance is reified, even though employees’ levels of performance do not vary across conditions: most notably, the bonus gap between top- and bottom-performing employees increases by 20% between our non-reified and reified conditions, and it rises by another 10% when performance is presented as a quantified score. Further analyses suggest that reification fuels inequality both by reinforcing the authoritativeness of evaluation and by making observers more accepting of the idea that individuals can be meaningfully sorted into a merit hierarchy. This has direct implications for understanding the rise of legitimate inequality in societies characterized by the proliferation of reifying forms of evaluation.

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The art world’s response to the challenge of inequality
Kristina Kolbe, Chris Upton-Hansen, Mike Savage, Nicola Lacey, Sarah Cant
Working paper 40

The art world’s response to the challenge of inequality

This paper considers the challenges which rising economic inequality poses to the art world with a special focus on museums and galleries in the UK. Based on interviews with artists, curators and managers of leading art institutions in London, we discuss how issues of economic inequality are reflected in their thinking about cultural work and how these relate to questions of spatial power, post-colonial sensibilities and diversity issues. We show how increasing economic inequality brings about deep-seated, systematic and sustained challenges which extend well beyond public funding cuts associated with austerity politics to a wider re-positioning of the arts away from its location in a distinctive public sphere and towards elite private privilege. Against this backdrop, we put forward the term ‘the artistic politics of regionalism’ and suggest that the most promising approaches to addressing contemporary inequalities lie in institutions’ reconsideration of spatial dynamics which can link concerns with decolonisation and representation to a recognition of how economic inequality takes a highly spatialised form.

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Hidden wealth
Neil Cummins
Working paper 39

Hidden wealth

Sharp declines in wealth-concentration occurred across Europe and the US during the 20th century. But this stylized fact is based on declared wealth. It is possible that today the richest are not less rich but rather that they are hiding much of their wealth. This paper proposes a method to measure this hidden wealth, in any form. In England, 1920-1992, elites are concealing 20-32% of their wealth. Among dynasties, hidden wealth, independent of declared wealth, predicts appearance in the Offshore Leaks Database of 2013-6, house values in 1999, and Oxbridge attendance, 1990-2016. Accounting for hidden wealth eliminates one-third of the observed decline of top 10% wealth-share over the past century.

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Exporting the winner-take-all economy: micro-level evidence on the impact of US investors on executive pay in the United Kingdom
Lukas Linsi, Jonathan Hopkin and Pascal Jaupart
Working paper 38

Exporting the winner-take-all economy: micro-level evidence on the impact of US investors on executive pay in the United Kingdom

Literature has long been attentive to the study of subjective happiness or well-being. Key questions developed in the late 1970’s have recently been framed as indicators of subjective economic stress or used to build “consensual poverty lines”. Yet, these notions differ from an authentic – i.e. direct – measure of subjective poverty. We use 2015-2018 French data to determine the share of the population who considers itself as poor and study its social composition. Our results demonstrate that class, family composition and income instability matter as determinants of subjective poverty. The key feature of the group of those who consider themselves as poor is a degraded attitude towards their own future. Finally, we propose a sociological understanding of our subjective poverty indicator.

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Where is the Middle Class? Inequality, gender and the shape of the upper tail from 60 million english death and probate records, 1892-2016
Neil Cummins
Working paper 30

Where is the Middle Class? Inequality, gender and the shape of the upper tail from 60 million english death and probate records, 1892-2016

 

This paper analyses a newly constructed individual level dataset of every English death andprobate from 1892-2016. The estimated top wealth shares match closely existing estimates.However, this analysis clearly shows that the 20th century's `Great Equalization' of wealthstalled in mid-century. The probate rate, which captures the proportion of English with anysignificant wealth at death rose from 10% in the 1890s to 40% by 1950 and has stagnated to2016. Despite the large declines in the wealth share of the top 1%, from 73% to 20%, themedian English person died with almost nothing throughout. All changes in inequality after1950 involve a reshuffling of wealth within the top 30%. Further, I find that a log-lineardistribution fits the empirical data better than a Pareto power law. Finally, I show that the topwealth shares are increasingly and systematically male as one ascends in wealth, 1892-1992, but this has equalized over the 20th century.

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Inequality Interactions
Paul Segal with Mike Savage
Working paper 27

Inequality Interactions  

This paper elaborates a framework for understanding inequalities that is multi-dimensional, inter-disciplinary, and dynamic. We first clarify the conceptual relationship between individual and categorical inequalities as studied by economists, sociologists, and other social scientists. We then present a set of new concepts. Inequality diversion is defined as a reduction in one form of inequality that is dependent on sustaining, or worsening, another form of inequality. We show how it arises out of cases in the literature on intersectionality, and that it also characterizes the transition to increasing meritocracy, and the relationship between increasing professional female labour market participation and domestic service. Inequality re-ordering is defined as a change in categorical or group inequalities that leaves individual inequality unchanged, such as when elites become more categorically diverse without reducing their economic or social distance from non-elites. We use these concepts to interrogate the potential of levelling up and progressive redistribution for inequality reduction. Exploring these relationships helps us understand trade-offs and complementarities in tackling inequalities.

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The Great British Sorting Machine: adolescents’ future in the balance offamily, school and the neighborhood
Jonathan J.B. Mijs and Jaap Nieuwenhuis
Working paper 26

The Great British Sorting Machine: adolescents’ future in the balance of family, school and the neighborhood 

 

Research calls attention to the divergent school and labor market trajectories of Europe’s youth while, across the Atlantic, researchers describe the long-lasting consequences of poverty on adolescent development. In this paper we incorporate both processes to shed a new light on a classic concern in the sociology of stratification: how are adolescents’ aspirations, expectations, and school performance shaped by the combined socioeconomic contexts of family, school and neighborhood life? Theoretically, social contexts provide children with cultural resources that may foster their ambitions and bolster their academic performance. Reference group theory instead highlights how seemingly positive settings can depress educational performance as well as aspirations and expectations. We empirically test these competing claims, drawing on the Avon Longitudinal Study of Parents and Children (ALSPAC) which describes the school and neighborhood trajectories of 7,934 British children followed from birth to adolescence. We find that, generally, childhood school and neighborhood deprivation is negatively associated with adolescents’ school performance, aspirations and expectations for their future, in line with the cultural resource perspective. However, there are important exceptions to this pattern which point to reference group processes for (1) children of highly-educated parents, whose academic performance especially suffers from growing up in a poor neighborhood, and (2) for children from low-educated parents, whose academic aspirations and expectations are unexpectedly high when they either went to an affluent school or lived in an affluent neighborhood - but not both. We conclude by discussing implications for theory, policy and future research. 

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Mapping recent inequality trends in developing countries
Rebecca Simson
Working paper 24

Mapping recent inequality trends in developing countries

Over the course of the middle half of the 20th century, countries around the world underwent dramatic social transformations as incomes grew, inequality declined and living standards improved. Since roughly 1980, however, this downward trend in income inequality has reversed or stagnated in many regions. Leading researchers have warned that we are entering a new era of high and persistent inequality coupled with low economic growth (Piketty 2014; Scheidel 2017). Yet other research suggests that this inequality escalation is not a universal phenomenon. As many scholars of global inequality have noted, Latin America saw a sizable decline in the gini index in the 2000s. The available evidence also suggests that many countries in Africa and the Middle East experienced an inequality drop in the 1990s-2000s. Even in Asia, where aggregate inequality has been on the rise, there are nonetheless a few countries where inequality is defying the regional trend. What does the available evidence tell us about inequality trends in these less studied regions of the world? What may explain these different trajectories across regions or countries? This paper provides a review of the state of knowledge about inequality dynamics in developing regions, with a focus on countries where the level of income inequality has fallen in recent decades. It is written to inform future research at LSE’s International Inequalities Institute about the political drivers of redistribution.

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Can cultural consumption increasefuture earnings? Exploring the economic returns to cultural capital
Aaron Reeves and Robert de Vries
Working paper 20

Can cultural consumption increase future earnings? Exploring the economic returns to cultural capital

 

Cultural consumption is often viewed as a form of embodied cultural capital which can be converted into economic rewards because such practices increase the likelihood of moving into privileged social positions. However, quantitative evidence supporting this proposition remains uncertain because it is often unable to rule out alternative explanations. Cultural consumption appears to influence hiring decisions in some elite firms, in both the U.S. and the U.K., but it is unclear whether these processes are generaliseable to other professional occupations and other labour market processes such as promotions. We examine these processes using data from Understanding Society, an individual-level panel survey conducted in the UK, allowing us to explore whether cultural consumption predicts future earnings, upward social mobility, and promotions. People who consume a larger number of cultural activities are more likely to earn higher wages in the future, to be upwardly socially mobile, and to be promoted. Cultural consumption, then, can function as cultural capital in some labour market settings, potentially contributing to the reproduction of income inequality between generations.

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The transition to the knowledge economy, labour market institutions, and income inequality in advanced democracies
David Hope and Angelo Martelli
Working paper 18

The transition to the knowledge economy, labour market institutions, and income inequality in advanced democracies

 

The transition from Fordism to the knowledge economy in the advanced democracies was underpinned by the ICT revolution. The introduction and rapid diffusion of ICT pushed up wages for college-educated workers with complementary skills and allowed top managers and CEOs to reap greater rewards for their talents. Despite these common pressures, income inequality did not rise to the same extent everywhere; the Anglo-Saxon countries stand out as being particularly unequal. To shed new light on this puzzle, we carry out a panel data analysis of 18 OECD countries between 1970 and 2007. The analysis stands apart from the existing empirical literature by taking a comparative perspective. We look at the extent to which the relationship between the knowledge economy and income inequality is influenced by national labour market institutions. We find that the expansion of knowledge employment is positively associated with both the 90–10 wage ratio and the income share of the top 1%, but that these effects are mitigated by the presence of strong labour market institutions, such as coordinated wage bargaining, strict employment protection legislation and high bargaining coverage. The study provides robust evidence against the argument that industrial relations systems are no longer important safeguards of wage solidarity in the knowledge economy.

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Top Incomes during Wars, Communism and Capitalism: Poland 1892-2015
Pawel Bukowski and Filip Novokmet
Working paper 17

Top Incomes during Wars, Communism and Capitalism: Poland 1892-2015

This study presents the history of top incomes in Poland. We document a U-shaped evo-lution of top income shares from the end of the 19th century until today. The initial high level, during the period of Partitions, was due to the strong concentration of capital income at the top of the distribution. The long-run downward trend in top incomes was primarily induced by shocks to capital income, from destructions of world wars to changed political and ideological environment. The Great Depression, however, led to a rise in top shares as the richest were less adversely affected than the majority of population consisting of smallholding farmers. The introduction of communism abruptly reduced inequalities by eliminating private capital income and compressing earnings. Top incomes stagnated at low levels during the whole communist period. Yet, after the fall of communism, the Polish top incomes experienced a substantial and steady rise and today are at the level of more unequal European countries. While the initial upward adjustment during the transition in the 1990s was induced both by the rise of top labour and capital incomes, the strong rise of top income shares in 2000s was driven solely by the increase in top capital incomes, which make the dominant income source at the top. We relate these developments to processes associated with the new phase in globalisation. 

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A Relational Analysis of Top Incomes and Wealth: economic evaluation, relative (dis)advantage and the service to capital
Katharina Hecht
Working paper 11

A Relational Analysis of Top Incomes and Wealth: economic evaluation, relative (dis)advantage and the service to capital

While an impressive body of economic literature documents increases in top incomes and wealth in liberal market economies, few studies focus on the social and cultural processes constitutive of this inequality. Drawing on a mixed-methods study in the UK, this article elaborates how top incomes and wealth are made sense of and produced by economic ‘elites’ through the cultural process of economic evaluation. Economic evaluative practices are based on the idea that ‘the market’ is a neutral and fair instrument for the distribution of resources. Due to economic evaluation and inequality at the top, top income earners experience relative (dis)advantage; while recognizing their advantage compared to the general population they experience disadvantage when ‘looking up’. Top incomes are produced via economic evaluative practices which conceptualize the value of labour based on increases in the value of capital. Hence the legitimating purpose of top incomes and wealth is service to capital. 

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The rise and fall of Africa's bureaucratic bourgeoisie: public employment and the income elites of postcolonial Kenya and Tanzania
Rebecca Simson
Working paper 10

The rise and fall of Africa's bureaucratic bourgeoisie: public employment and the income elites of postcolonial Kenya and Tanzania

In 1961 Frantz Fanon scathingly characterised the emerging African elite as a bourgeoisie of the civil service. Many others have since described Africa’s public sector employees as a privileged rentier class that grew disproportionately large in relation to the continent’s under-developed private sector. Is this characterisation accurate? Using household budget survey and administrative data from Kenya and Tanzania, this paper aims to situate public sector employees in two African countries within their respective national income distributions and establish the share of high-income households that were headed by public servants. It finds that while public sector employees formed a considerable share of the top 1% - 0.1% at independence, their share of the broader middle class was never that large and fell substantially over the postcolonial era.

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Wealth, Top Incomes and Inequality
Frank Cowell, Brian Nolan, Javier Olivera and Philippe Van Kerm
Working paper 9

Wealth, Top Incomes and Inequality

Although it is heartening to see wealth inequality being taken seriously, key concepts are often muddled, including the distinction between income and wealth, what is included in "wealth", and facts about wealth distributions. This paper highlights issues that arise in making ideas and facts about wealth inequality precise, and employs newly-available data to take a fresh look at wealth and wealth inequality in a comparative perspective. The composition of wealth is similar across countries, with housing wealth being the key asset.  Wealth is considerably more unequally distributed than income, and it is distinctively so in the United States. Extending definitions to include pension wealth however reduces inequality substantially. Analysis also sheds light on life-cycle patterns and the role of inheritance. Discussion of the joint distributions of income and wealth suggests that interactions between increasing top income shares and the concentration of wealth and income from wealth towards the top is critical.

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Who are the Global Top 1%?
Sudhir Anand and Paul Segal
Working paper 8

Who are the Global Top 1%?

 

This paper presents the first in-depth analysis of the changing composition of the global income rich and the rising representation of developing countries at the top of the global distribution. We construct global distributions of income between 1988 and 2012 based on both household surveys and the new top incomes data derived from tax records, which better capture the rich who are typically excluded from household surveys. We find that the representation of developing countries in the global top 1% declined until about 2002, but that since 2005 it has risen significantly. This coincides with a decline in global inequality since 2005, according to a range of measures. We compare our estimates of the country-composition and income levels of the global rich with a number of other sources – including Credit Suisse’s estimates of global wealth, the Forbes World Billionaires List, attendees of the World Economic Forum, and estimates of top executives’ salaries. To varying degrees, all show a rise in the representation of the developing world in the ranks of the global elite.

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Gendering the elites: an ethnographic approach to elite women’s lives andthe re-production of inequality
Luna Glucksberg
Working paper 7

Gendering the elites: an ethnographic approach to elite women's lives and the re-production of inequality

 

This paper argues that the process by which accumulated capital is socialized and passed down the generations of the 'super-rich' is gendered in nature, heavily reliant on women, and currently under-researched. The author addresses this gap ethnographically, focusing on the gendered labour that women perform to sustain and reproduce the dynaist projects of elite families. In light of this data, elite London emerges as a social space structured around strong hierarchies not just of class but also gender. The paper concludes that it is essential to understand more about the interplay of these two structuring principles within elite spaces, focusing on the 'invisible' labour performed by elite women.

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Top incomes and the gender divide
Tony Atkinson, Sarah Voitchovsky and Alessandra Casarico
Working paper 5

Top incomes and the gender divide

In the recent research on top incomes, there has been little discussion of gender. How many of the top 1 and 10 per cent are women? A great deal is known about gender differentials in earnings, but how far does this carry over to the distribution of total incomes, bringing self-­employment and capital income into the picture? We investigate the gender divide at the top of the income distribution using tax record data for a sample of eight countries with individual taxation. We show that women are under-­represented at the top of the distribution. They account for between a fifth and a third of those in the top 10 per cent. Higher up the income distribution, the proportion is lower, with women constituting between 14 and 22 per cent of the top 1 per cent. The presence of women in the top income groups has generally increased over time, but the rise becomes smaller at the very top. As a result, the gradient with income has become more marked: the under-­representation of women today increases more sharply. Examination of the shape of the income distribution by fitting a Pareto distribution shows that at the end of the period women disappear faster than men as one moves up the income scale in all countries. In this sense, there appears to be something of a “glass ceiling” for women. In the case of Canada, Denmark, Norway and New Zealand, there appears to have been a reversal over time, with the slope of the upper tail having been steeper for women in the past. In seeking to explain this, we highlight the role of income composition, where we show that there have been significant changes over time, underlining the fact that it is not sufficient to look only at earned income.

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The challenge of measuring UK wealth inequality in the 2000s
Facundo Alvaredo, Anthony B. Atkinson and Salvatore Morelli
Working paper 4

The challenge of measuring UK wealth inequality in the 2000s

The concentration of personal wealth is now receiving a great deal of attention – after having been neglected for many years. One reason is the growing recognition that, in seeking explanations for rising income inequality, we need to look not only at wages and earned income but also at income from capital, particularly at the top of the distribution. In this paper, we use evidence from existing data sources to attempt to answer three questions: (i) What is the share of total personal wealth that is owned by the top 1 per cent, or the top 0.1 per cent? (ii) Is wealth much more unequally distributed than income? (iii) Is the concentration of wealth at the top increasing over time? The main conclusion of the paper is that the evidence about the UK concentration of wealth post-2000 is seriously incomplete and significant investment in a variety of sources is necessary if we are to provide satisfactory answers to the three questions.

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European Identity and Redistributive Preferences
Joan Costa-Font and Frank Cowell
Working paper 3

European Identity and Redistributive Preferences

How important is spatial identity in shifting preferences for redistribution? This paper takes advantage of within-country variability in the adoption of a single currency as an instrument to examine the impact of the rescaling of spatial identity in Europe. We draw upon data from the last three decades of waves of the European Values Survey and we examine the impact of joining the single currency on preferences for redistribution. Our instrumentation strategy relies on using the exogenous effect of joining a common currency, alongside a battery of robustness checks and alternative instruments. Our findings suggest that joining the euro has a boosting effect on European identity; an opposite and comparable effect is found for national pride. We find that European identity increases preferences for redistribution, and that national pride exerts an equivalent reduction in preferences for redistribution.

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Inequality – what can be done?
A. B. Atkinson
Working paper 2

Inequality – what can be done?

How important is spatial identity in shifting preferences for redistribution? This paper takes advantage of within-country variability in the adoption of a single currency as an instrument to examine the impact of the rescaling of spatial identity in Europe. We draw upon data from the last three decades of waves of the European Values Survey and we examine the impact of joining the single currency on preferences for redistribution. Our instrumentation strategy relies on using the exogenous effect of joining a common currency, alongside a battery of robustness checks and alternative instruments. Our findings suggest that joining the euro has a boosting effect on European identity; an opposite and comparable effect is found for national pride. We find that European identity increases preferences for redistribution, and that national pride exerts an equivalent reduction in preferences for redistribution.

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An interview with Thomas Piketty, Paris 8th July 2015
Mike Savage
Working paper 1

An interview with Thomas Piketty, Paris 8th July 2015

This interview focuses on Thomas Piketty’s future intellectual plans which build on his Capital in the 21st Century. It explores his interests in expanding databases on wealth and income, and in analysing inequality at different spatial scales, including cities, regions, and global processes. The interview discusses his understanding of new elites and their relationship with older elites, and clarifies his understanding of social class and inheritance. It includes discussions on his relationship with the discipline of economics and with the social sciences more generally. It reflects on conceptual issues, including his theoretical interests in Bourdieu and Marx, and his relationship to socialist theory and politics. His new role in the LSE’s International Inequalities Institute is also discussed.

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