So happy to see our article forthcoming at AEJ: Applied 🥳 This was the very first paper I ever worked on, quite a journey since we started collecting data in 2017 with @thomas_blncht and @lucas_chancel!
— Amory Gethin (@amorygethin) November 12, 2021
Here are five facts that we uncover about income inequality in 🇪🇺 and 🇺🇸: 👇 pic.twitter.com/PshShGJT5t
Key reasons?
US is getting richer faster than other developed countries but within the US the top US incomes are rising still faster.US tax system is much more progressive than in Europe (greater reliance on progressive income taxes and less reliance on regressive taxes such as VAT.)US social support network is much more redistributive than in Europe with the US redistributing 6% of the national income to the bottom 50% compared to, for example, only 4% in Sweden.
Despite this evidence, the researchers conclude that the US ought to adopt European policies which reduce national productivity but which also reduce inequality. It is the old trade-off. You can be richer in the US (all levels of society) but more unequal OR you can be more equal in Europe but at the expense of also being poorer.
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