Advertisement

Wealth Inequality and Its Historical Context

  • Livio Di Matteo
Chapter

Abstract

Wealth inequality is the disparity in asset ownership. Wealth provides more economic security than income and is a better indicator of economic and political power. The long-term impact of industrialization and growth in the Kuznets Curve Hypothesis postulates an optimistic inverted u-shaped inequality-growth relationship, as opposed to Piketty’s pessimism. Evidence supports and contradicts the Kuznets curve and finds additional economic, technological, demographic, social, and institutional factors affecting the long-term distribution of both wealth and income. On balance, the studies conducted suggest that economic inequality was relatively lower in pre-industrial periods, grew during industrialization, and then appears to have been mitigated in the wake of industrialization with the advent of social security, public policy, and social investments that may have broadened wealth accumulation opportunities.

Keywords

Kuznets Technology Piketty Wealth shares 

References

  1. Abad, L. A., & Junquera, P. A. (2017). Latin American Earnings Inequality in the Long Run. Cliometrica, 11(3), 349–374.CrossRefGoogle Scholar
  2. Alfani, G. (2015). Economic Inequality in Northwestern Italy: A Long-Term View (Fourteenth to Eighteenth Centuries). Journal of Economic History, 75(4), 1058–1096.CrossRefGoogle Scholar
  3. Alfani, G., & Ammannati, F. (2017). Long-Term Trends in Economic Inequality: The Case of the Florentine State, c. 1300–1800. The Economic History Review, 70(4), 1072–1102.CrossRefGoogle Scholar
  4. Alfani, G., & Ryckbosch, W. (2016). Growing Apart in Early Modern Europe? A Comparison of Inequality Trends in Italy and the Low Countries, 1500–1800. Explorations in Economic History, 62, 143–153.CrossRefGoogle Scholar
  5. Arrondel, L., & Grange, C. (2003). The Accumulation and Transmission of Wealth over Long Periods: Example of a Rural Family from Loire-Atlantique in the 19th and 20th Centuries. The History of the Family: An International Quarterly, 2003(8), 103–134.CrossRefGoogle Scholar
  6. Arrondel, L., & Grange, C. (2006). Transmission and Inequality of Wealth: An Empirical Study of Wealth Mobility from 1800 to 1938 in France. Journal of Economic Inequality, 2006(4), 209–232.CrossRefGoogle Scholar
  7. Arrondel, L., & Grange, C. (2014). Bequests and Family Traditions: The Case of Nineteenth Century France. Review of Economics of the Household, 12(3), 439–459.CrossRefGoogle Scholar
  8. Atack, J., & Bateman, F. (1981). Egalitarianism, Inequality, and Age: The Rural North in 1860. Journal of Economic History, XLI, 85–93.CrossRefGoogle Scholar
  9. Atkinson, A. B. (2000). Distribution of Income and Wealth in Britain over the Twentieth Century. In A. Halsey & J. Webb (Eds.), Twentieth-Century British Social Trends. Basingstoke: Palgrave Macmillan.Google Scholar
  10. Atkinson, A. B. (2013, November). Wealth and Inheritance in Britain from 1896 to the Present. Centre for Analysis of Social Exclusion, No. 173.Google Scholar
  11. Atkinson, A. B., & Harrison, A. (1978). The Distribution of Personal Wealth in Britain. Cambridge: Cambridge University Press.Google Scholar
  12. Atkinson, A. B., Gordon, J. P. F., & Harrison, A. (1989). Trends in the Shares of Top Wealthholders in Britain: 1923–1989. Oxford Bulletin of Economics and Statistics, 51(3), 315–332.CrossRefGoogle Scholar
  13. Baskerville, P. (1999). Women and Investment in Late-Nineteenth-Urban Canada: Victoria and Hamilton, 1880–1901. The Canadian Historical Review, 80(2), 191–218.CrossRefGoogle Scholar
  14. Bolton, S. C. (1982). Inequality on the Southern Frontier: Arkansas County in the Arkansas Territory. The Arkansas Historical Quarterly, 41(1), 51–66.CrossRefGoogle Scholar
  15. Bouchard, G. (1998). Economic Inequalities in Saguenay Society, 1879–1949: A Descriptive Analysis. The Canadian Historical Review, 79(4), 660–690.CrossRefGoogle Scholar
  16. Burchell, R. A. (1987). Opportunity and the Frontier: Wealth-Holding in Twenty-Six Northern Californian Counties 1848–1880. The Western Historical Quarterly, 18(2), 177–196.CrossRefGoogle Scholar
  17. Canaday, N. (2008). The Accumulation of Property by Southern Blacks and Whites: Individual-Level Evidence from a South Carolina Cotton County, 1910–1919. Explorations in Economic History, 45, 51–75.CrossRefGoogle Scholar
  18. Clay, K., & Jones, R. (2008). Migrating to Riches? Evidence from the California Gold Rush. The Journal of Economic History, 68(4), 997–1027.CrossRefGoogle Scholar
  19. Coatsworth, J. H. (2008). Inequality, Institutions and Economic Growth in Latin America. Journal of Latin American Studies, 40(August), 545–569.Google Scholar
  20. Darroch, G. (1983). Early Industrialization and Inequality in Toronto, 1861–1899. Labour/Le Travailleur, 11, 31–61.CrossRefGoogle Scholar
  21. Darroch, G., & Soltow, L. (1994). Property and Inequality in Victorian Ontario Structural Patterns and Cultural Communities in the 1871 Census. Toronto: University of Toronto Press.Google Scholar
  22. Davies, J. B. (1979). On the Size Distribution of Wealth in Canada. Review of Income and Wealth, 25(3), 237–259.CrossRefGoogle Scholar
  23. Davies, J. B., & Shorrocks, A. F. (1999). The Distribution of Wealth. In A. B. Atkinson & F. Bourguignon (Eds.), Handbook of Income Distribution (Vol. 1). New York: Elsevier Science.Google Scholar
  24. Davies, J., & Shorrocks, A. (2000). The Distribution of Wealth. In A. Atkinson & F. Bourguignon (Eds.), Handbook of Income Distribution (Vol. 1, pp. 605–675). North Holland, Amsterdam/New York: Elsevier.CrossRefGoogle Scholar
  25. Davies, J. B., Sandstrom, S., Shorrocks, A., & Wolff, E. N. (2011). The Level and Distribution of Global Household Wealth. The Economic Journal, 121, 223–254.CrossRefGoogle Scholar
  26. Di Matteo, L. (2016). Wealth Distribution and the Canadian Middle Class: Historical Evidence and Policy Implications. Canadian Public Policy, 42(2), 132–151.CrossRefGoogle Scholar
  27. Di Matteo, L., & George, P. (1992). Canadian Wealth Inequality in the Late Nineteenth Century: A Study of Wentworth County, Ontario, 1872–1902. The Canadian Historical Review, LXXIII, 453–483.CrossRefGoogle Scholar
  28. Di Matteo, L., & George, P. (1998). Patterns and Determinants of Wealth Among Probated Decedents in Wentworth County, Ontario, 1872–1902. Histoire Sociale/Social History, XXXI(61), 1–34.Google Scholar
  29. Ferrie, J. (1994). The Wealth Accumulation of Antebellum European Immigrants to the U.S., 1840–1860. Journal of Economic History, 54, 1–33.CrossRefGoogle Scholar
  30. Fisher, J., Johnson, D., Smeeding, T., & Thompson, J. (2016a, September). Inequality in 3D: Income, Consumption and Wealth. Washington Center for Equitable Growth (Working paper series).Google Scholar
  31. Fisher, J., Johnson, D., Latner, J. P., Smeeding, T., & Thompson, J. (2016b). Inequality and Mobility Using Income, Consumption, and Wealth for the Same Individuals. The Russell Sage Foundation Journal of the Social Sciences, 2, 44–58.CrossRefGoogle Scholar
  32. Gallman, R. E. (1969). Trends in the Size Distribution of Wealth in the Nineteenth Century: Some Speculations. In L. Soltow (Ed.), Six Papers on the Size Distribution of Wealth and Income. New York: National Bureau of Economic Research.Google Scholar
  33. Galt, M. N. (1985). Wealth and Income in New Zealand 1870 to 1939. Unpublished PhD Thesis, Victoria University, WellingtonGoogle Scholar
  34. Gregson, M. E. (1996). Wealth Accumulation and Distribution in the Midwest in the Late Nineteenth Century. Explorations in Economic History, 33, 524–538.CrossRefGoogle Scholar
  35. Gwyn, J., & Siddiq, F. K. (1992). Wealth Distribution in Nova Scotia During the Confederation Era, 1851 and 1871. The Canadian Historical Review, LXXIII(4), 435–452.CrossRefGoogle Scholar
  36. Hamilton, G. C., Keay, I., & Lewis, F. (2017). Contributions to Canadian Economic History: The Last 30 Years. Canadian Journal of Economics, 50(5), 1632–1657.CrossRefGoogle Scholar
  37. Herscovici, S. (1993). The Distribution of Wealth in Nineteenth Century Boston: Inequality Among Natives and Immigrants, 1860. Explorations in Economic History, 30, 321–335.CrossRefGoogle Scholar
  38. Higgins, M., & Williamson, J. G. (2002). Explaining Inequality the World Round: Cohort Size, Kuznets Curves, and Openness. Southeast Asian Studies, 40(3), 268–302. Reprinted in B. Milanovic (Ed.) (2012). Globalization and Inequality. Cheltenham: Elgar.Google Scholar
  39. Johnson, L. L., & Frank, Z. (2006). Cities and Wealth in the South Atlantic: Buenos Aires and Rio de Janeiro Before 1860. Comparative Studies in Society and History, 48(3), 634–668.Google Scholar
  40. Jones, A. H. (1980). Wealth of A Nation to Be: The American Colonies on the Eve of the Revolution. New York: Columbia Press.Google Scholar
  41. Krueger, D., & Perri, F. (2006). Does Income Inequality Lead to Consumption Equality? Evidence and Theory. Review of Economic Studies, 73(1), 163–193.CrossRefGoogle Scholar
  42. Kuznets, S. (1955). Economic Growth and Income Inequality. American Economic Review, XLV(1), 1–28.Google Scholar
  43. Kuznets, S. (1966). Modern Economic Growth Rate, Structure and Spread. New Haven: Yale University Press.Google Scholar
  44. Lindert, P. H. (1986). Unequal English Wealth Since 1670. The Journal of Political Economy, 94(6), 1127–1162.CrossRefGoogle Scholar
  45. Lindert, P. H. (1991). Toward a Comparative History of Income and Wealth. In Y. S. Brenner, H. Kaelble, & M. Thomas (Eds.), Income Distribution in Historical Perspective (pp. 212–231). Cambridge: Cambridge University Press.Google Scholar
  46. Lindert, P. H. (2000). Three Centuries of Inequality in Britain and America. In A. B. Atkinson & F. Bourguignon (Eds.), Handbook of Income Distribution (Vol. 1). Amsterdam: North-Holland.Google Scholar
  47. Lindert, P. H., & Williamson, J. G. (1985). Growth, Equality and History. Explorations in Economic History, 22, 341–377.CrossRefGoogle Scholar
  48. Lindert, P. H., & Williamson, J. G. (2012). American Incomes 1774–1860. National Bureau of Economic Research, Working Paper 18396.Google Scholar
  49. Lindert, P. H., & Williamson, J. G. (2016). Unequal Gains: American Growth and Inequality Since 1700. Princeton: Princeton University Press.CrossRefGoogle Scholar
  50. Main, G. L. (1975). Probate Records as a Source for Early American History. William and Mary Quarterly, 32(1), 89–99. 3rd ser.CrossRefGoogle Scholar
  51. Malinowski, M., & van Zanden, J. L. (2016). Income and Its Distribution in Preindustrial Poland. Cliometrica. https://doi.org/10.1007/s11698-016-0154-5.
  52. McAloon, J. (2002). No Idle Rich: The Wealthy in Canterbury and Otago 1840–1914. Dunedin: University of Otago Press.Google Scholar
  53. Meyer, B. D., & Sullivan, J. X. (2017, August). Consumption and Income Inequality in the U.S. Since the 1960s. NBER Working Paper No. 23655.Google Scholar
  54. Milanovic, B. (2016). Global Inequality: A New Approach for the Age of Globalisation. Cambridge, MA: Harvard University Press.CrossRefGoogle Scholar
  55. Morissette, R., & Zhang, X. (2006). Revisiting Wealth Inequality. Perspectives. Statistics Canada No. 75-001-XIE, pp. 5–16.Google Scholar
  56. Newell, W. H. (1980). The Wealth of Testators and Its Distribution: Butler County Ohio, 1803–65. In J. D. Smith (Ed.), Modelling the Distribution and Intergenerational Transmission of Wealth, NBER Studies in Income and Wealth (Vol. 46, pp. 95–138). Chicago: University of Chicago Press.Google Scholar
  57. Newell, W. H. (1986). Inheritance on the Maturing Frontier: Butler County Ohio, 1803–1865. In S. L. Engerman & R. E. Gallman (Eds.), Long-Term Factors in American Economic Growth, NBER Studies in Income and Wealth (Vol. 51, pp. 261–303). Chicago: University of Chicago Press.Google Scholar
  58. Nicolini, E. A., & Palencia, F. R. (2015). Comparing Income and Wealth Inequality in Pre-Industrial Economies. Lessons from Spain in the 18th Century. http://www.academia.edu/1752082/Comparing_Income_and_Wealth_Inequality_in_Pre-Industrial_economies._Lessons_from_Spain_in_the_18th_century
  59. Nicolini, E. A., & Palencia, F. R. (2016). Decomposing Income Inequality in a Backward Pre-Industrial Economy: Old Castile (Spain) in the Middle of the Eighteenth Century. The Economic History Review, 69(3), 747–772.CrossRefGoogle Scholar
  60. Ohlsson, H., Roine, J., & Waldenström, D. (2008). Long-Run Changes in the Concentration of Wealth: An Overview of Recent Findings. In J. B. Davies (Ed.), Personal Wealth from a Global Perspective. Oxford: Oxford University Press.CrossRefGoogle Scholar
  61. Oja, G. (1983). The Distribution of Wealth in Canada. Review of Income and Wealth, 29(2), 161–173.CrossRefGoogle Scholar
  62. Osberg, L., & Siddiq, F. K. (1993). The Acquisition of Wealth in Nova Scotia in the Late Nineteenth Century. Research in Economic Inequality, 4, 181–202.Google Scholar
  63. Owens, A., Green, D.R., Bailey, C. and Kay, A.C. (2006). A Measure of Worth: Probate Valuations, Personal Wealth and Indebtedness in England, 1810–40. Historical Research, 79(205), 383–403.CrossRefGoogle Scholar
  64. Piketty, T. (2014). Capital in the 21st Century. Cambridge, MA: Harvard University Press.Google Scholar
  65. Pope, C. L. (1989). Households on the American Frontier: The Distribution of Income and Wealth in Utah 1850–1900. In D. W. Galenson (Ed.), Markets in History: Economic Studies of the Past (pp. 148–189). Cambridge: Cambridge University Press.Google Scholar
  66. Reeves, R. V. (2017). Dream Hoarders. How the American Upper Middle Class Is Leaving Everyone Else in the Dust. Washington, DC: Brooking.Google Scholar
  67. Reis, J. (2016). Deviant Behaviour? Inequality in Portugal 1565–1770. Cliometrica. https://doi.org/10.1007/s11698-016-0152-7.
  68. Roine, J., & Waldenström, D. (2015). Long-Run Trends in the Distribution of Income and Wealth. In A. B. Atkinson & F. Bourguignon (Eds.), Handbook of Income Distribution (Vol. 2A, pp. 469–592). Amsterdam: Elsevier.Google Scholar
  69. Rubinstein, W. D. (1979). The Distribution of Personal Wealth in Victoria 1860–1974. Australian Economic History Review, 19, 26–41.CrossRefGoogle Scholar
  70. Saez, E., & Veall, M. (2005). The Evolution of High Incomes in Northern America: Lessons from Canadian Evidence. American Economic Review, 95, 831–849.CrossRefGoogle Scholar
  71. Shammas, C. (1993). A New Look at Long-Term Trends in Wealth Inequality in the United States. The American Historical Review, 98(2), 412–431.CrossRefGoogle Scholar
  72. Shanahan, M. P. (1995). The Distribution of Personal Wealth in South Australia, 1905–1915. Australian Economic History Review, 35(2), 82–111.CrossRefGoogle Scholar
  73. Siddiq, F. K. (1988). The Size Distribution of Probate Wealth-Holdings in Nova Scotia in the Late 19th Century. Acadiensis, 18(1), 136–147.Google Scholar
  74. Siddiq, F. K., & Gwyn, J. (1991). The Importance of Probate Inventories in Estimating the Distribution of Wealth. Nova Scotia Historical Review, 11, 103–117.Google Scholar
  75. Soltow, L. (1975). Men and Wealth in the United States 1850–1870. New Haven: Yale University Press.Google Scholar
  76. Soltow, L. (1979). Inequality Amidst Abundance: Land Ownership in Early 19th Century Ohio. Ohio History, 88(2), 133–151.Google Scholar
  77. Soltow, L. (1981). The Distribution of Property Values in England and Wales in 1798. The Economic History Review, 34(2), 60–70.CrossRefGoogle Scholar
  78. Soltow, L. (1989). Distribution of Wealth and Income in the United States in 1798. Pittsburgh: University of Pittsburgh Press.Google Scholar
  79. Steckel, R. H. (1990). Poverty and Prosperity: A Longitudinal Study of Wealth Accumulation, 1850–1860. The Review of Economics and Statistics, 72(2), 275–285.CrossRefGoogle Scholar
  80. Steckel, R. H., & Moehling, C. M. (2001). Rising Inequality: Trends in the Distribution of Wealth in Industrializing New England. Journal of Economic History, 61, 160–183.CrossRefGoogle Scholar
  81. Stewart, J. I. (2006). Migration to the Agricultural Frontier and Wealth Accumulation, 1860–1870. Explorations in Economic History, 43(4), 547–577.CrossRefGoogle Scholar
  82. Walker, T. R. (2000). Economic Opportunity on the Urban Frontier: Wealth and Nativity in Early San Francisco. Explorations in Economic History, 37, 258–277.CrossRefGoogle Scholar
  83. Williamson, J. G., & Lindert, P. H. (1980). American Inequality: A Macroeconomic History. New York: Academic Press.Google Scholar
  84. Wolff, E. N. (2010, March). Recent Trends in household Wealth in the United States: Rising Debt and the Middle Class Squeeze-an Update to 2007. Levy Economics Institute. Working Paper No. 589.Google Scholar
  85. Wolff, E. N., & Marley, M. (1989). Long-Term Trends in U.S. Wealth Inequality: Methodological Issues and Results. In R. E. Lipsey & H. S. Tice (Eds.), The Measurement of Saving and Wealth. Chicago: NBER.Google Scholar
  86. Wolfson, M. C. (1979). Wealth and the Distribution of Income, Canada 1969–70. The Review of Income and Wealth, 25(2), 129–140.CrossRefGoogle Scholar

Copyright information

© The Author(s) 2018

Authors and Affiliations

  • Livio Di Matteo
    • 1
  1. 1.Department of EconomicsLakehead UniversityThunder BayCanada

Personalised recommendations