World Top Incomes Database

Alvaredo, Facundo and Atkinson, Anthony B. and Piketty, Thomas and Saez, Emmanuel (2017). World Top Incomes Database. [Data Collection]. Colchester, Essex: UK Data Archive. 10.5255/UKDA-SN-851805

The first theme of the research programme is the assembly and analysis of historical evidence from fiscal records on the long-run development of economic inequality. “Long run” is a relative term, and here it means evidence dating back before the Second World War, and extending where possible back into the nineteenth century. The time span is determined by the sources used, which are based on taxes on incomes, earnings, wealth and estates.

Perspective on current concerns is provided by the past, but also by comparison with other countries. The second theme of the research programme is that of cross-country comparisons. The research is not limited to OECD countries and will draw on evidence globally.

In order to understand the drivers of inequality, it is necessary to consider the sources of economic advantage. The third theme is the analysis of the sources of income, considering separately the roles of earned incomes and property income, and examining the historical and comparative evolution of earned and property income, and their joint distribution.

The fourth theme is the long-run trend in the distribution of wealth and its transmission through inheritance. Here again there are rich fiscal data on the passing of estates at death.

Data description (abstract)

The World Top Incomes Database provides statistical information on the shares of top income groups for 30 countries.
The construction of this database was possible thanks to the research of over thirty contributing authors.

There has been a marked revival of interest in the study of the distribution of top incomes using tax data. Beginning with the research by Thomas Piketty of the long-run distribution of top incomes in France, a succession of studies has constructed top income share time series over the long-run for more than twenty countries to date. These projects have generated a large volume of data, which are intended as a research resource for further analysis.

In using data from income tax records, these studies use similar sources and methods as the pioneering work by Kuznets for the United States.The findings of recent research are of added interest, since the new data provide estimates covering nearly all of the twentieth century -a length of time series unusual in economics.
In contrast to existing international databases, generally restricted to the post-1970 or post-1980 period, the top income data cover a much longer period, which is important because structural changes in income and wealth distributions often span several decades.

The data series is fairly homogenous across countries, annual, long-run, and broken down by income source for several cases. Users should be aware also about their limitations. Firstly, the series measure only top income shares and hence are silent on how inequality evolves elsewhere in the distribution. Secondly, the series are largely concerned with gross incomes before tax. Thirdly, the definition of income and the unit of observation (the individual vs. the family) vary across countries making comparability of levels across countries more difficult. Even within a country, there are breaks in comparability that arise because of changes in tax legislation affecting the definition of income, although most studies try to correct for such changes to create homogenous series. Finally and perhaps most important, the series might be biased because of tax avoidance and tax evasion.

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