Why care about the rich when studying inequality? This was the question provocatively asked by Daniel Waldenström, from Uppsala University, Sweden, at a seminar organised by the University of Luxembourg, the EIB Institute and other partners as part of the “Inequality and…” lecture series.
Because top incomes, especially the top 1%, represent an overwhelming share of developed countries’ income. While wealth inequality has remained fairly stable, income inequality has increased significantly over the past decades from a “global low” around 1980.
However, the super rich category is very heterogeneous, with highly-paid employees, wealthy rentiers, self-made entrepreneurs and inheritors. There are also variations across countries and over time.
Political factors (taxation, regulation, etc.) play a key role, he concluded quoting the example of the UK and Japan where financial deregulation increased top income shares by 20% and 10%, respectively.
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