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

Atkinson, Piketty, and Saez: Top Incomes in the Long Run of History554.03.5IndiaSingaporeArgentinaChinaPareto-Lorenz coefficient3.02.52.01.51.0192019251930193519401945195019551960196519701975198019851990199520002005Figure 15. Inverted-Pareto β Coefficients, Developing Countries: 1920–2005Source: Atkinson and Piketty (2007, 2010).wage earnings accounted for less than 10 percentof the income of the top 0.01 percent butby 2004 this had increased to over 20 percent.In Spain, a similar calculation (from figuresthat omit capital gains) shows that, in 1981,earnings accounted for less than 20 percentof the income of the top 0.01 percent but by2004 this had increased to 40 percent.At the same time, the picture is not totallyuniform. A major difference between theNordic countries and the United States isthe continuing importance in the formerof capital income. In Sweden, Roine andWaldenström (2008) find that “between1945 and 1978 the wage share at all levelsof top incomes became more important. . .. But in 2004 the pattern is back to that of1945 in terms of the importance of capital, inparticular when we include realized capitalgains.” The conclusions reached regardingFinland stress that “the main factor that hasdriven up the top 1 percent income share inFinland after the mid 1990s is an unprecedentedincrease in the fraction of capitalincome” (Jantti et al. 2010). This may reflectdifferences in reporting behavior followingtax reforms, but it is not totally a differencebetween Nordic countries and the Anglo-Saxons. In Australia, Atkinson and Leigh(2007a) found that “the proportion of salaryand wage income for top income groups in2000 was quite similar to the proportion in1980.” In the United Kingdom, it is true thatthe major themes have been the fall in capitalincomes over the first three-quarters of thetwentieth century and the subsequent rise intop earnings, but minor themes have beenan earlier fall on the share of top earners and