"Top Incomes in the Long Run of History" with Tony Atkinson and

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48Journal of Economic Literature, Vol. XLIX (March 2011)1807–1914 period (with an acceleration ofthe trend in the last three to four decadesprior to 1914) and that the downturn did notstart until the First World War. Due to thelack of similar wealth series for other countries,it is difficult to know whether this is ageneral pattern.4.2 The Postwar PictureReturning to more recent times, we cansee that there was considerable diversity ofexperience over the period from 1949 tothe beginning of the twenty-first century.If we ask in how many cases the share ofthe top 1 percent rose or fell by more than2 percentage points between 1949 and 2005(bearing in mind that two-thirds were in therange 8 to 12 percent in 1949), then we findthe seventeen countries more or less evenlydivided: six had a fall of two points or more,five had a rise of two points or more, and sixhad a smaller or no change. If we ask in howmany cases the inverted-Pareto–Lorenz βcoefficient changed by more than 0.1, thenthis was true of fifteen out of twenty countriesin table 6, with twelve showing a rise (amove to greater concentration). Examinationof the annual top 1 percent share data forindividual countries is depicted on figures8–11 confirms that, during the 50+ yearssince 1949, individual countries followed differenttime paths.Can we nonetheless draw any commonconclusions? Is it for example the case that allwere following a U-shape, and that the differenceswhen comparing 2005 and 1949 arisesimply because some countries are furtheradvanced? Is the United States leading theway, with other countries lagging? In table 8,we summarize the time paths from 1949 to2005 for the sixteen countries for which wehave fairly complete data over this period forthe share of the top 1 percent and top 0.1percent. In focusing on change, we are notinterested in small differences after the decimalpoints. The criterion applied in the caseof the share of the top 1 percent is that usedabove: a change of 2 percentage points ormore. For the share of the top 0.1 percent,we apply a criterion of 0.65 percentage points(i.e., scaled by 3.25/10). In applying this, weconsider only sustained changes. This meansthat we do not recognize changes due to taxreforms that distort the figures as in the caseof Norway (Aarberge and Atkinson 2010) orNew Zealand (Atkinson and Leigh 2008),those due to the commodity price boom ofthe early 1950s as for Australia, New Zealand,and Singapore, or other changes that are notmaintained for several years.Applying this criterion, there is just onecase—Finland—where there is a patternof rise/fall/rise. The share of the top 1 percentin Finland rose from below 8 percentin 1949 (it has been lower before then) toaround 10 percent in the early 1960s. Of theremaining fifteen countries, one can distinguisha group of six “flat” countries (France,Germany, Switzerland, the Netherlands,Japan, Singa pore) and a group of nine“U-shaped” countries (United Kingdom,United States, Canada, Australia, NewZealand, India, Argentina, Sweden, Norway).The ten countries belonging to the secondgroup appear to fit, to varying degrees,the U-shape hypothesis that top shares havefirst fallen and then risen over the postwarperiod. In most countries, the initial fall wasof limited size. As may be seen from table 8,the initial falls in top shares were lessmarked in the United States, Canada, andNew Zealand than in the United Kingdom,Australia, and India. The share of the top1 percent was much the same in the UnitedStates and United Kingdom in 1949 but, inthe United Kingdom, the share then halvedover the next quarter century, whereas inthe United States it fell by only a little overa quarter.The frontier between the U-shaped countriesand the flat countries is somewhatarbitrary and should not be overstressed.
Atkinson, Piketty, and Saez: Top Incomes in the Long Run of History49Table 8Summary of Changes in Shares of Top 1 Percent and 0.1 Percent between 1949 and 2005Country Share of top 1 percent Share of top 0.1 percentFranceNo change;rose 1 point between 1998 and 2005Fell 1 point between 1949 and early 1980s;rose 0.4 point between 1998 and 2005United Kingdom Fell 6; rose 7½ points Fell 2; rose 3 pointsUnited States Fell 3; rose 10 points Fell 1; rose 6 pointsCanada Fell 3; rose 6 points (up to 2000) Fell 1; rose 3½ points (up to 2000)Australia Fell 7; rose 4 points Fell 2; rose 1½ pointsNew Zealand Fell 3; rose 4 points Fell 1; rose 1½ pointsGermany No sustained change No sustained changeNetherlands Fell 6½ points (up to 1999) Fell 3 points (up to 1999)Switzerland No sustained change No sustained changeIndia Fell 7½; rose 4½ points (up to 1999) Fell 4; rose 2½ points (up to 1999)Japan No sustained change up to 1999;rose 1½ points between 1999 and 2005Singapore No sustained change from 1960 to 1998;rose 2 points between 1998 and 2005No sustained change up to 1999;rose ¾ point between 1999 and 2005No sustained change from 1960 to 1990s;rose 2 points between 1990s and 2005Argentina Fell 12; rose 4 points Fell 5½; rose 3 pointsSweden Fell 3½; rose 2 points Fell 1¼; rose 1¼ pointsFinland Rose 2 points up to early 1960s; fell 6points; rose 3½ pointsNorway Fell 4½; rose 8 points Fell 1¾; rose 4½ pointsNotes:(1) “No change” means change less than 2 percentage points for top 1 percent;less than 0.65 percentage point for top 0.1 percent.(2) Data coverage incomplete for part of the period for Argentina.Source: Atkinson and Picketty (2007, 2010).In France, after an initial reduction in concentration,the top 1 percent income sharehas begun to rise since the late 1990s (figure9). In Japan and Singapore, the reboundin recent years is even more pronounced(figures 9 and 11). The only three countrieswith no sign of a rise in income concentrationduring the most recent period, namelySwitzerland, Germany, and the Netherlands,are countries where our series stop in thelate 1990s. There exists some reasonablepresumption that when data become availablefor the 2000s, these countries mightalso display an upward trend. Finally, notethat Switzerland and especially Germanyhave always been characterized by a significantlylarger concentration at the top thanother continental European countries. Thisis also apparent in the observed patterns ofPareto β coefficients, which more generallydepict the same contrast between L-shapedand U-shaped countries as top income shares(see figures 12 and 13).What about countries for which we haveonly a shorter time series? The time series forChina is indeed short, but there too the top
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