Distributional Growth Accounting: Education and the Reduction of Global Poverty, 1980-2019
Quarterly Journal of Economics, forthcoming.
Columns: VoxEU, IMF Finance and Development Magazine.
This article quantifies the role played by education in the reduction of global poverty. I propose tools for identifying the contribution of schooling to economic growth by income group, integrating imperfect substitution between skill groups into macroeconomic growth decomposition. I bring this “distributional growth accounting” framework to the data by exploiting a new microdatabase representative of nearly all of the world’s population, new estimates of the private returns to schooling, and historical income distribution statistics. Education can account for about 45% of global economic growth and 60% of pretax income growth among the world’s poorest 20% since 1980. A significant fraction of these gains was made possible by skill-biased technical change amplifying the returns to education. Because they ignore the distributional effects of schooling, standard growth accounting methods substantially underestimate economic benefits of education for the global poor.
with Clara Martínez-Toledano and Thomas Piketty
Quarterly Journal of Economics 137(1), 1–48, February 2022. Editor’s choice. Appendix / Data.
Press: Financial Times, The Economist, The Guardian, Le Monde, Die Zeit, El País, El Diario, Germinal, Breaking Points.
Columns: United Nations Development Programme.
This article sheds new light on the long-run evolution of political cleavages in 21 Western democracies. We exploit a new database on the socioeconomic determinants of the vote, covering over 300 elections held between 1948 and 2020. In the 1950s and 1960s, the vote for social democratic, socialist, and affiliated parties was associated with lower-educated and low-income voters. It has gradually become associated with higher-educated voters, giving rise in the 2010s to a disconnection between the effects of income and education on the vote: higher-educated voters now vote for the “left,” while high-income voters continue to vote for the “right.” This transition has been accelerated by the rise of green and anti-immigration movements, whose distinctive feature is to concentrate the votes of the higher-educated and lower-educated electorates. Combining our database with historical data on political parties’ programs, we provide evidence that the reversal of the education cleavage is strongly linked to the emergence of a new “sociocultural” axis of political conflict.
Why is Europe More Equal than the United States?
with Thomas Blanchet and Lucas Chancel
American Economic Journal: Applied Economics 14(4), 480–518, October 2022. Appendix
Press: Financial Times, Vox, Le Monde, LCI, Kontrast, Challenges, France 24.
Columns: VoxEU, LSE Business Review, Project Syndicate, United Nations Development Programme.
This article combines all available survey, income tax, and national accounts data to produce pretax and posttax income inequality series in twenty-six European countries from 1980 to 2017. Our estimates are consistent with macroeconomic growth rates and comparable with US distributional national accounts. Inequality grew in nearly all European countries, but much less than in the US. This rise was concentrated at the top end of the income distribution and was most pronounced in Eastern Europe. Contrary to a widespread view, we demonstrate that Europe’s lower inequality levels cannot be explained by more equalizing tax-and-transfer systems. After accounting for indirect taxes and in-kind transfers, the US redistributes a greater share of national income to low-income groups than any European country. “Predistribution,” not “redistribution,” explains why Europe is less unequal than the United States.
Wealth Inequality in South Africa, 1993-2017
with Aroop Chatterjee and Léo Czajka
World Bank Economic Review 36(1), 19–36, February 2022. Appendix.
Press: The Economist, Time, GroundUp, Business Tech, Sunday Times, News24.
This article estimates the distribution of personal wealth in South Africa by combining microdata covering the universe of income tax returns, household surveys, and macroeconomic balance sheet statistics. South Africa is characterized by unparalleled levels of wealth concentration. The top 10% own 86% of aggregate wealth and the top 0.1% close to one-third. The top 0.01% of the distribution (3,500 individuals) concentrate 15% of household net worth, more than the bottom 90% as a whole. Such levels of inequality can be accounted for in all forms of assets at the top end, including housing, pension funds, and financial assets. There has been no sign of decreasing inequality since the end of apartheid.
Income Inequality in Africa, 1990-2019: Measurement, Patterns, Determinants
with Lucas Chancel, Denis Cogneau, Alix Myczkowski, and Anne-Sophie Robilliard
World Development 163, 106-162, March 2023.
Press: The Economist.
This article estimates the evolution of income inequality in Africa from 1990 to 2019 by combining surveys, tax data, and national accounts. Inequality in Africa is very high: the regional top 10% income share nears 55%, on par with regions characterized by extreme inequality, such as Latin America and India. Most of continent-wide income inequality comes from the within-country component rather than from average income differences between countries. Inequality is highest in Southern Africa and lowest in Northern and Western Africa. It remained fairly stable from 1990 to 2019, with the exception of Southern Africa, where it increased significantly. Among historical determinants, this geographical pattern seems to reveal the long shadow of settler colonialism, at least in Sub-Saharan Africa; the spread of Islam stands out as another robust correlate.
Growing Cleavages in India? Evidence from the Changing Structure of Electorates, 1962-2014
with Abhijit Banerjee and Thomas Piketty
Economic and Political Weekly 54(11), 34-44, March 2019. Working Paper & Appendix.
Press: Economic Times, Mint, The Print.
This paper combines surveys, election results and social spending data to document a long-run evolution of political cleavages in India. The transition from a dominant-party system to a fragmented system characterized by several smaller regionalist parties and, more recently, the Bharatiya Janata Party, coincides with the rise of religious divisions and the persistence of strong caste-based cleavages. Education, income and occupation play a diminishing role (controlling for caste) in determining voters’ choices. There is no evidence of the new party system being associated with changes in social policy. In India, as in many Western democracies, political conflicts are increasingly focused on identity and religious–ethnic conflicts rather than on tangible material benefits and class-based redistribution.
with Emmanuel Saez.
This paper uses labor force surveys from 157 countries to build a new microdatabase on hours worked covering 97% of the world population in cross section. We also construct time series spanning over three decades in 79 countries. Hours worked per adult are slightly bell-shaped with GDP per capita but weakly correlated with development overall. Hours worked by the young (aged 15-19) and elderly (aged 60+) decline with development, driven by growing school attendance and public pension coverage. Hours worked among prime-age adults (aged 20-59) are mildly bell-shaped with development for men while they are increasing for women. The fall in male hours in middle-to-higher income countries is driven by reduced hours per worker and is offset by increases in female labor force participation. These two forces have exactly compensated each other in many countries, leading to a remarkable long-run stability of prime-age hours worked. Labor taxes—but not consumption taxes—are strongly negatively correlated with hours worked both in international comparisons and overtime within countries. Controlling for government transfers only partly reduces the link between labor taxes and hours, ruling out substitution and income effects on labor supply as the key driver. Controlling for working hours regulations and the size of the formal sector almost entirely eliminates this link, suggesting that they explain the low levels of work hours observed in high-income countries.
Revisiting Global Poverty Reduction: Public Goods and the World Distribution of Income, 1980-2022
Global poverty statistics ignore transfers received by households in the form of public services. This article leverages unique microdata, public spending series, and quality indicators to construct new government redistribution measures that include education and healthcare in 173 countries. There have been considerable improvements in public services received by the global poor. The consumption of education and healthcare accounts for 30% of growth among the world’s poorest 20% since 1980. Total redistribution, including cash and in-kind transfers, accounts for 50%. Public services can also rationalize all of the growing disconnection between survey and GDP aggregates documented in the literature.
Who Benefits from Public Services? Novel Evidence and Implications for Inequality Measurement
Revise & Resubmit, Journal of Development Economics.
Traditional inequality statistics focus on disposable income, ignoring transfers received by households in the form of public services. This article provides novel evidence on the distribution of in-kind transfers and its implications for inequality measurement. I combine historical budget data with rich microdata to estimate the distributional incidence of all major public services provided in South Africa from 1993 to 2019. All government transfers reduce inequality, but with large variations. The poorest 50% consume 60% of public education, 50% of healthcare, 40% of police and local government services, and only 7% of transport infrastructure. There have been enormous improvements in public services since the end of apartheid: in-kind transfers can account for half of real income growth among low-income households since 1993. These results have major implications for recent debates on inequality measures consistent with macroeconomic growth: typical assumptions made in the literature underestimate the rise of redistribution by 60%.
Human Capital, Unequal Opportunities and Productivity Convergence: A Global Perspective, 1800-2100
with Nitin Bharti, Thanasak Jenmana, Zhexun Mo, Thomas Piketty, and Li Yang.
This paper constructs a new global historical database on public expenditure and revenue and their components—particularly education and health expenditure— covering all world regions over the 1800-2025 period. We document a large rise of human capital expenditure (as % of GDP) in all parts of the world in the long run, but with enormous and persistent inequality between regions. Public education expenditure per school-age individual in Sub-Saharan Africa is about 3% of the level observed in Europe and North America in 2025 in PPP terms (versus 6% in 1980 and 4% in 1950). We also find a large impact of human capital expenditure on productivity growth over the 1800-2025 period, especially for public education and for poor countries. Estimated returns using our macro-historical database are around 10% or more, in line with micro studies. Finally, we present simulations based on alternative human capital expenditure trajectories over the 2025-2100 period. In particular, we analyze the conditions under which convergence in human capital expenditure could lead to global productivity convergence by 2100 (around 100€ per hour in all regions in our benchmark scenario).
Global Income Inequality by 2050: Convergence, Redistribution, and Climate Change
with Philipp Bothe, Lucas Chancel, and Cornelia Mohren.
Press: Le Monde, Libération, La Tribune.
This article investigates how national income convergence, government redistribution, and climate change will shape the global distribution of income until 2050. Despite ongoing convergence in national income, the global bottom 50% post-tax income share only marginally rises from 10% to 12% under “business-as-usual”, while the top 1% share remains constant. Yet, modest national-level redistribution policies can raise the global bottom 50% share to up to 19%. Policies involving redistribution of pre-tax income are particularly effective in reducing global inequality. Climate change is set to exacerbate inequalities, potentially offsetting all convergence effects since 1980.
with Vincent Pons. NBER Working Paper.
Press: Washington Post, Marginal Revolution, The Atlantic, Noahpinion.
Recent social movements stand out by their spontaneous nature and lack of stable leadership, raising doubts on their ability to generate political change. This article provides systematic evidence on the effects of protests on public opinion and political attitudes. Drawing on a database covering the quasi-universe of protests held in the United States, we identify 14 social movements that took place from 2017 to 2022, covering topics related to environmental protection, gender equality, gun control, immigration, national and international politics, and racial issues. We use Twitter data, Google search volumes, and high-frequency surveys to track the evolution of online interest, policy views, and vote intentions before and after the outset of each movement. Combining national-level event studies with difference-in-differences designs exploiting variation in local protest intensity, we find that protests generate substantial internet activity but have limited effects on political attitudes. Except for the Black Lives Matter protests following the death of George Floyd, which shifted views on racial discrimination and increased votes for the Democrats, we estimate precise null effects of protests on public opinion and electoral behavior.
with Matthew Fisher-Post.
Column: VoxEU.
This article builds and analyzes a new database on the distributional incidence of taxes and transfers in 151 countries from 1980 to 2019. Our estimates allocate the entirety of tax revenue and public expenditure to individuals, combining household surveys, national accounts, government budgets, tax simulators, and existing fiscal incidence studies. We establish five main findings. (1) Tax-and-transfer systems always reduce inequality, but with large variations. (2) About 90% of these variations are driven by transfers, while only 10% come from taxes. (3) Redistribution rises with development, but this is entirely due to transfers; tax progressivity is uncorrelated with per capita income. (4) Redistribution has increased in most world regions, except in Africa and Eastern Europe, where it has stagnated. (5) About 80% of variations in posttax inequality are driven by differences in pretax inequality (“predistribution”), while 20% are driven by the direct effect of taxes and transfers (“redistribution”). Countries with higher redistribution display lower levels of pretax inequality, however, pointing to a potentially large role of redistributive policies in indirectly shaping the distribution of market incomes.
Redistribution without Inclusion? Inequality in South Africa Since the End of Apartheid
with Aroop Chatterjee and Léo Czajka.
Press: The Economist.
This article sheds new light on the evolution of income inequality and government redistribution in post-apartheid South Africa. We combine survey, tax, and historical budget data to construct a new microdatabase on the distribution of labor and capital incomes, taxes, cash transfers, and public services since 1993. Pretax income inequality has increased, but this rise has been overcompensated by major expansions in government redistribution. After accounting for taxes and transfers, low-income households have benefited from the greatest real income gains. However, South Africa still stands out as one of the most unequal countries in the world. In 2019, the top 1% received almost 20% of posttax income, more than the bottom 50% as a whole. Racial inequalities have declined, but this decline has been entirely driven by the boom of top Black income groups. We highlight the role of taxes and transfers as powerful levers of inclusive growth yet insufficient tools to curb South Africa’s extreme inequalities.
Minimum Wages and Inequality, 1894-2024 (with Louise Paul-Delvaux)
Global Human Capital Inequality (with Samuel Kofi Tetteh Baah and Christoph Lakner)
Education and Economic Outcomes in the Long Run: France, 1789-2024 (with Tom Raster)
Political Cleavages in Contemporary Democracies (with Clara Martínez-Toledano).
Chapter prepared for the Handbook of Political Economy (ed. Daron Acemoglu and James Robinson).
Inflation and Political Preferences (with Clara Martínez-Toledano and José-Luis Peydro)
Political Cleavages and Social Inequalities. A Study of Fifty Democracies, 1948–2020
Co-edited with Thomas Piketty and Clara Martínez-Toledano.
Harvard University Press, 2021. 656 pages. 19 chapters.
Introduction. Objectives and Organization of the Book
with Clara Martínez-Toledano and Thomas Piketty, in Political Cleavages and Social Inequalities, 2021.
Political Cleavages and Social Inequalities in 50 Democracies, 1948-2020
with Clara Martínez-Toledano and Thomas Piketty, in Political Cleavages and Social Inequalities.
in Political Cleavages and Social Inequalities.
with Luis Bauluz, Clara Martínez-Toledano, and Marc Morgan, in Political Cleavages and Social Inequalities.
with Carmen Durrer de la Sota and Clara Martínez-Toledano, in Political Cleavages and Social Inequalities. Appendix
Caste, Class, and the Changing Political Representation of Social Inequalities in India, 1962-2019
with Abhijit Banerjee and Thomas Piketty, in Political Cleavages and Social Inequalities.
Social Inequality and the Dynamics of Political and Ethnolinguistic Divides in Pakistan, 1970-2018
with Sultan Mehmood and Thomas Piketty, in Political Cleavages and Social Inequalities.
Political Cleavages and the Representation of Social Inequalities in Japan, 1953-2017
in Political Cleavages and Social Inequalities.
with Thanasak Jenmana, in Political Cleavages and Social Inequalities.
Inequality, Identity, and Political Cleavages in South Korea, Taiwan, and Hong Kong, 1996-2016
with Carmen Durrer de la Sota, in Political Cleavages and Social Inequalities.
Democracy and the Politicization of Inequality in Brazil, 1989-2018
with Marc Morgan, in Political Cleavages and Social Inequalities. Appendix
in Political Cleavages and Social Inequalities.
Social Inequalities and Ethnic Cleavages in Botswana, Ghana, Nigeria, and Senegal, 1999-2019
with Jules Baleyte, Yajna Govind, and Thomas Piketty, in Political Cleavages and Social Inequalities.
Political Cleavages and Social Inequalities in Algeria, Iraq, and Turkey, 1990-2019
with Lydia Assouad, Thomas Piketty, and Juliet Uraz, in Political Cleavages and Social Inequalities.
Conclusion. Main Takeaways and Research Perspectives
with Clara Martínez-Toledano and Thomas Piketty, in Political Cleavages and Social Inequalities.
A Wealth Tax for South Africa: A Proposal to Help Finance COVID-19 Pandemic Measures
with Aroop Chatterjee and Léo Czajka
in Wealth tax: Perspectives in a post-pandemic world, International Policy Centre for Inclusive Growth, 2021/12.
with Aroop Chatterjee and Léo Czajka
World Inequality Lab Working Paper 2021/02 / NIHSS Innovative Research Paper, 2021. Wealth Tax Simulator
Rising Inequalities and Political Cleavages in Spain
with Clara Martínez-Toledano and Marc Morgan
World Inequality Lab Issue Brief 2019/4, 2019. [Español]
Has the European model withstood the rise of inequalities?
with Thomas Blanchet and Lucas Chancel
World Inequality Lab Issue Brief 2019/3, 2019. [Français] [Deutsch] [Español]
Extreme Inequality, Democratisation and Class Struggles in Thailand
with Thanasak Jenmana
World Inequality Lab Issue Brief 2019/1, 2019.
Brazil Divided: Hindsights on the Growing Politicization of Inequality
with Marc Morgan
World Inequality Lab Issue Brief 2018/3, 2018. [Français]
Foreign Assets and Incomes in Comparative Perspective
World Inequality Lab Issue Brief 2018/1, 2018.
Confiance et Anticipations au Lendemain de l’Élection Présidentielle de 2017
Observatoire du Bien-Être, CEPREMAP, 2018.
Google: Espace Politique, Espace de Préoccupations
with Yann Algan, Elizabeth Beasley, Thanasak Jenmana, and Claudia Senik
Observatoire du Bien-Être, CEPREMAP, 2017.
A New Database of General Government Revenue and Expenditure by Function, 1980-2022
World Inequality Lab Technical Note 2024/01.
Building the World Political Cleavages and Inequality Database
with Clara Martínez-Toledano and Thomas Piketty
World Inequality Lab Technical Note 2021/01.
Cleavage Structures and Distributive Politics
Master Thesis directed by Thomas Piketty and Abhijit V. Banerjee, 2018.
Building a Global Income Distribution Brick by Brick
with Lucas Chancel
World Inequality Lab Technical Note 2017/5, 2017.
World Inequality Report 2018 Technical Notes for Figures and Tables
with Lucas Chancel and Richard Clarke
World Inequality Lab Technical Note 2017/8, 2017.
Qu’apportent les Théories Économiques à la Compréhension du Commerce International ?
with Édouard Mien
Regards Croisés sur l’Economie 2017/2 (n°21): À qui profite la mondialisation ?
L’Écotaxe : la Taxation des Poids Lourds en France
with Marianne Fresnel, David Futscher-Perreira, Esther Raineau-Rispal, and Chloé Wren
Projet de Description de Controverse, École des Mines de Paris, 2015.