Why Is Europe More Equal than the United States?

Thomas Blanchet, Lucas Chancel and Amory Gethin

American Economic Journal: Applied Economics, 2022, vol. 14, issue 4, 480-518

Abstract: This article combines all available data to produce pretax and posttax income inequality series in 26 European countries from 1980 to 2017. Our estimates are consistent with macroeconomic growth and comparable with US distributional national accounts. Inequality grew in nearly all European countries, but much less than in the US. 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.

JEL-codes: D31 E01 H23 H24 H50 I38 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (19)

Downloads: (external link)
https://www.aeaweb.org/doi/10.1257/app.20200703 (application/pdf)
https://doi.org/10.3886/E150641V1 (text/html)
https://www.aeaweb.org/doi/10.1257/app.20200703.appx (application/pdf)
https://www.aeaweb.org/doi/10.1257/app.20200703.ds (application/zip)
Access to full text is restricted to AEA members and institutional subscribers.

Related works:
Working Paper: Why Is Europe More Equal than the United States? (2022)
Working Paper: Why Is Europe More Equal than the United States? (2022)
Working Paper: Why Is Europe More Equal Than the United States? (2020)
Working Paper: Why Is Europe More Equal Than the United States? (2020)
Working Paper: Why Is Europe More Equal Than the United States? (2020)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:aea:aejapp:v:14:y:2022:i:4:p:480-518

Ordering information: This journal article can be ordered from
https://www.aeaweb.org/journals/subscriptions

DOI: 10.1257/app.20200703

Access Statistics for this article

American Economic Journal: Applied Economics is currently edited by Alexandre Mas

More articles in American Economic Journal: Applied Economics from American Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Michael P. Albert ().