1. Power, Markets, and Top Income Shares
- Author:
- Evelyne Huber, Huo Jingjing, and John D. Stephens
- Publication Date:
- 04-2015
- Content Type:
- Working Paper
- Institution:
- Kellogg Institute for International Studies
- Abstract:
- The rise of the super-rich has attracted much political and academic attention in recent years. However, to date there have been few attempts to explain the cross-national variation in the recent rise of very top incomes. Drawing on the World Top Incomes Database, we study the income share of the top 1% in almost all current postindustrial democracies from 1975 to 2012. We find that extreme income concentration at the very top is a predominantly political phenomenon, not the outcome of economic changes. Top income shares are largely unrelated to economic growth, increased knowledge-intensive production, export competitiveness, market size, financialization, and wealth accumulation. Instead, they are driven by various political and policy changes that reflect a decline in the relative power and resources of labor, such as union density and centralization, secular-right governments, and cuts in top marginal income tax rates as well as in public spending on education.
- Topic:
- Economics, Industrial Policy, Political Economy, and Social Stratification