Equality and Development:
A Comparative & Historical Perspective 1800-2025
*Key Findings*
* There exists a strong positive association between equality and development over the long run.
* All rich countries—especially in Western and Nordic Europe—have undergone an enormous compression of income scales during the 20th century, while becoming significantly more productive. In Nordic Europe, the ratio between the top and bottom of the income distribution (P99/P10) fell from about 50 in 1910 to less than 5 today, and the ratio between the very top and the bottom (P99.9/P10) from about 150 to under 10.
* This compression was accompanied by rising productivity, not decline: Nordic countries today exhibit higher hourly output than the United States, even though total human capital expenditure (public + private) is substantially larger in the US.
* There is a residual positive impact of equality on productivity, even after controlling for other factors such as human capital investment.
* The post-1980 rebound of inequality in the US (and to a lesser extent in Europe) was not followed by faster, but rather by lower productivity growth.
* World regions that experienced little or no inequality compression—such as Latin America, South and Southeast Asia, and Sub-Saharan Africa—showed low and uneven productivity growth, controlling for other factors.
* Overall, the results suggest that the rise of inclusive, social-democratic institutions—expanding access to education, public services, labor rights, progressive taxation, and democratic participation—has been central to achieving both greater equality and higher prosperity.
WID - World Inequality Database
Equality and Development: A Comparative & Historical Perspective 1800-2025 - WID - World Inequality Database
Equality and Development: A Comparative & Historical Perspective 1800-2025 This paper combines income and wealth inequality series from the World I...
