Economics of Inequality: Measures and Findings

Objective

The objective of this course is to present recent – and less recent - work on income and wealth inequality with a focus on long run inequality and its determinants, lifetime inequality and intergenerational mobility. It intends to mix theoretical and empirical approaches. 

Planning

Economics of Inequality: Measures & Findings

This a first draft of the lecture, subject to further changes

1-      Introduction: Why do we care about inequality? Theoretical and empirical justifications

2-      Long-run trends in income inequality

3-      Determinants of labor income inequality 

4-      Redistribution: Labor supply theory and optimal redistribution

5-      Long-run trends in wealth inequality

6-      Determinants of wealth inequality

7-      Going beyond current (cross sectional) income inequality: lifetime income inequality and intergenerational mobility

8-      Concluding remarks

References

There is no textbook covering all the materials that will be studied during the lectures. Attendance to all the lectures is thus essential.  Selected readings will be associated with each lecture. 

Articles to be presented during the lectures: 

Ravaillon M., "What might explain today’s conflicting narratives on global inequality ?", 2018 https://doi.org/10.1093/oso/9780198863960.003.0002

Lakner C., and Milanovic B., "Global Income Distribution : From the Fall of the Berlin Wall to the Great Recession", The World Bank Economic Review, 2016 https://academic.oup.com/wber/article-abstract/30/2/203/2224294 

Rousille N., “The central role of the ask gap in gender pay inequality”, Quarterly Journal of Economics, 2024 https://academic.oup.com/qje/article-abstract/139/3/1557/7608508

Kleven H., Landais C., and Sogaard J.E., Children and gender inequality: evidence from Denmark, American Economic Journal: Applied Economics, 2019 https://www.aeaweb.org/articles?id=10.1257/app.20180010

Kleven H., "The EITC and the Extensive Margin : A Reappraisal", Journal of Public Economics, 2024 https://doi.org/10.1016/j.jpubeco.2024.105135

Fack G. and Grenet J., "Improving College Access and Success for Low-Income Students: Evidence from a Large Need-Based Grant Program", American Economic Journal: Applied Economics , 2015 https://www.aeaweb.org/articles?id=10.1257/app.20130423

Alstadsæter A, Jacob M, Michaely R. , “Do Dividend taxes affect corporate investment ?”, Journal of Public Economics , 2019 https://www.sciencedirect.com/science/article/abs/pii/S0047272715000961

Martinez I., Saez E., and Siegenthaler M., “Intertemporal Labor Supply Substitution? Evidence from the Swiss Income Tax Holidays”, American Economic Review, 2021 https://www.aeaweb.org/articles?id=10.1257/aer.20180746

Kleven H., Landais C., Munoz M., and Stantcheva S., “Taxation and Migration: Evidence and Policy Implications”, Journal of Economic Perspectives, 2020 https://www.aeaweb.org/articles?id=10.1257/jep.34.2.119

Alstadsæter A., Johannesen N., and Zucman G., “Tax Evasion and Inequality”, American Economic Review, 2019 https://www.aeaweb.org/articles?id=10.1257/aer.20172043

Chetty R., Friedman J.N., Saez E., Turner N., Yagan D., “Income segregation and intergenerational mobility across colleges in the United States”, The Quarterly Journal of Economics,2020 https://academic.oup.com/qje/article/135/3/1567/5741707

Alstadsæter A., Johannesen N., and Zucman G., “Who owns the wealth in tax havens? Macro evidence and implications for global inequality”, Journal of Public Economics, 2018 https://gabriel-zucman.eu/files/AJZ2018.pdf

Autor D., Dorn D., and Hanson G., “When Work Disappears: Manufacturing Decline and the Falling Marriage Market Value of Young Men”, American Economic Review: Insights, 2019 https://pubs.aeaweb.org/doi/pdfplus/10.1257/aeri.20180010

Alesina A., Stantcheva S., and Teso E., “Intergenerational Mobility and Preferences for Redistribution”, American Economic Review, 2018 https://pubs.aeaweb.org/doi/pdfplus/10.1257/aer.20162015

Guvenen F., Kaplan G., Song J., Weidner J., “Lifetime Earnings in the United States over Six Decades”, American Economic Journal: Applied Economics, 2022 https://www.aeaweb.org/articles?id=10.1257/app.20190489

Douenne T. and Fabre A., “Yellow Vests, Pessimistic Beliefs, and Carbon Tax Aversion”, American Economic Journal: Economic Policy, 2022 https://www.aeaweb.org/articles?id=10.1257/pol.20200092&&from=f
 

Some general but not compulsory readings are: 

A. B. Atkinson, Stiglitz J. (2015), “Lectures on Public Economics”, Princeton University Press, 2015

Alvaredo, F., Atkinson, A., T. Piketty, E. Saez, and G. Zucman (2018), “World Inequality Report”

Piketty, T. and E. Saez (2013), “Optimal Labor Income Taxation”, In A. J. Auerbach, R. Chetty, M. Feldstein, and E. Saez (Eds.), Handbook of Public Economics, Volume 5, pp. 391–474.

Kopczuk Wojciech (2013), “Taxation of intergenerational transfers and wealth”, in A. Auerbach, R. Chetty, M. Feldstein and E. Saez (Eds.)?, Handbook of Public Economics, Volume 5, pp 329–90.