This paper investigates how the concentration of farmland mediates the impact of climate change on agricultural productivity, with direct implications on resilience to heatwaves. We use a unique combination of French cadastral data and satellite imagery to demonstrate that more unequally distributed land entail greater losses during and after climatic shocks, primarily due to a lack of crop diversity resulting from specialisation. Contrarily to what is found in natural ecosystems in the biology literature, we uncover a productivity-resilience tradeoff, according to which more unequal regions, i.e, less diverse, tend to be less resilient but more productive. Our findings have implications for farmers and policymakers, who should consider these tradeoffs to ensure food security and price stability in the face of the climate crisis.
How much wealth has accumulated in the region and how is it distributed across households? Despite being widely recognized for its extreme income inequality, reliable data on wealth is scarce, partial and oftentimes contradictory, making it difficult to answer these basic questions. In this study, we estimate aggregates based on macroeconomic data, and inequality based on recently available surveys. We contrast our results with the literature, with a handful of state-of-the-art estimates from administrative sources, and with more available but extrapolated estimates from Credit Suisse and wid.world. Considering all the evidence, we distinguish reliable facts from what can only be conjectured or speculated. We find that aggregate wealth increased over two decades in four countries, now ranging close to 3.5 the national income for market value estimates and 5-6 times at book values. We also find that wealth inequality is amongst the highest in the world were it can be measured. Given data limitations, one can only speculate about aggregates in opaque countries and about inequality trends in any country in the region. Although recent research in the developed world has focused in combining data sources to better understand wealth, the region lags behind and urgently requires more and better public information.
More Unequal or Not as Rich? Revisting the Latin American exception
Latin America is often portrayed as a global exception to the rising or consolidating income inequality trends of the early twenty-first century. However, the use of administrative data and macroeconomic aggregates casts doubts on this survey-based narrative. In this paper we revisit the region’s exceptionalism by building the most comprehensive data base thus far, which accounts for 80% of the region’s population and combines harmonised surveys, social security and tax data, and national accounts. We produce a set of inequality indicators —pre and post-tax, based on alternative units and income definitions— which allows us to track the distributional effects of each methodological step and reconcile divergent trends. The reconciliation of micro and macro data present us with a dilemma: either the region is more unequal or it is not as rich as officially reported. The result of distributing the data gaps is a region much more heterogeneous in its inequality trends. Falling inequality is most visible among the bottom 99%, but the trend flattens or reverses in the largest economies once the top 1% and capital incomes are better accounted for. Post-tax and disposable incomes do not change the picture much, except when in-kind social spending is considered. These results confirm the strengths and highlight the limits of Latin America’s redistributive policies during the period.
The Inequality (or the Growth) we Measure: Data Gaps and the Distribution of Incomes
There is a large gap between income estimates used in inequality studies and macroeconomic statistics. This makes it hard to assess how economic growth is distributed across the population, and to what extent mainstream distributional statistics are an accurate representation of income flows. We take stock of these discrepancies by confronting estimates of the income distribution from surveys, administrative records and aggregates from the system of national accounts, thoroughly documenting them over the past two decades for ten Latin American countries. We find that surveys only account for around half of the macroeconomic income in the region. Measurement gaps account for just over half of the overall gap on average, while the rest is due to conceptual differences across data sets. Measurement gaps have been growing fast for many countries, the bulk being due to non-covered capital income. We also compare the top tails in administrative data and surveys, finding diverging averages –especially for non-wage incomes– and different shapes. We discuss the degree to which inequality levels and trends could be affected.
Household surveys often fail to capture the top tail of income and wealth distributions, as evidenced by studies based on tax data. Yet to date there is no consensus on how to best reconcile both sources of information, given the multiple biases at play. This paper contributes a novel method, rooted in standard calibration theory, to directly confront the problem of survey non-response between survey micro-data and anonymous tax data under reasonable assumptions. Our key innovation is to endogenously determine a “merging point” between the datasets, above which we start to incorporate information from tax data into the survey, under the assumption that the rate of representativeness is constant, then decreasing with income. This is followed by a “reweighting” and a “replacing” step, which preserves the microdata structure of the original survey, assuming no re-ranking of observations. We illustrate our approach with simulations, which show that our method is robust to the existence of income misreporting, and performs better than alternative methods. We also apply it to real data from five countries, both developed and less developed, finding changes to the levels and trends in income inequality. We discuss several limits to our approach and suggest some guidelines for future research.
The capital share and income inequality: Increasing gaps between micro and macro-data
In this paper, I study how the contrasting coverage of labour and capital incomes affects inequality estimates. I use national accounts as a benchmark to evaluate the scope of household surveys, for a number of countries, and tax data for the United States. Due to both measurement error and conceptual differences, capital income is always more underestimated. In most countries, the gap grows during the last two decades. Based on accounting identities, I show that inequality estimates are likely affected in level, trend and composition. Surveys thus largely exaggerate the impact of changes in the labour income distribution, while they undermine the capital share and its dynamics. As a reference, in a panel of nineteen countries, households collect half of total capital income, as opposed to corporations; but surveys only capture close to twenty percent of that half, versus seventy percent of total labour income. For any quantile group –e.g. the top 10% or bottom 50% share– a unit increase of its labour income share translates into an increase of nine tenths of a unit in the overall share, for capital income, the effect is only one tenth of a unit. Gaps are narrower but still present in tax data.
Top incomes in Chile: A historical perspective on income inequality, 1964–2017
We present a novel series of Chilean top-income shares covering half a century, mainly based on income-tax declarations and the National Accounts. Such a time frame of analysis is still rare in the literature of developing countries. We distinguish between a fiscal-income series (1964–2017) and an adjusted series (1990–2017). The former covers individual income, while the latter also includes corporate undistributed profits, which affects both levels and trends. The fiscal-income estimates start with low levels and a decreasing trend over the 1960s. They then increase rapidly during the dictatorship years (1973–89). The series ends with a high, yet slowly decreasing, concentration for most of the recent democratic period (1990–2017). By contrast, the adjusted series has followed a U-shape since the return of democracy, contradicting the established consensus on falling inequality over the period. Furthermore, Chile ranks among the most unequal countries in both the OECD and Latin American countries over the period.
Chile es uno de los países con los mayores índices de desigualdad económica a nivel mundial en términos de ingresos. Aunque exista poca información a nivel local, la literatura internacional nos indica que la desigualdad patrimonial es probablemente aún mayor. Este capítulo realiza algunos de los primeros pasos para medir la concentración de la riqueza en Chile de manera sólida, transparente y comparable internacionalmente. Al combinar nuestras estimaciones con datos de estudios previos, estimamos que un impuesto patrimonial marginal y progresivo, que afectaría a menos del 0.5% de la población, tendría un potencial recaudatorio de hasta un 1.5% del PIB
Desigualdad y Distribución del Crecimiento Económico en Chile
Durante las últimas dos décadas, los datos fiscales han servido para mejorar las estadísticas mundiales sobre la distribución de los ingresos y de la riqueza. El ejemplo más reciente son las Cuentas Nacionales Distributivas impulsadas por el World Inequality Database, que combinan diversas fuentes de datos para estudiar la desigualdad. En este capítulo, se presentan en detalle los resultados para el caso chileno. Estos ponen en duda el consenso ampliamente aceptado, según el cual la desigualdad habría disminuido progresivamente durante el último periodo democrático. Por el contrario, al incluir los ingresos más altos y corregir las rentas de capital, el nivel de concentración de los ingresos no solamente aumenta considerablemente, sino que también cambian las tendencias de desigualdad. En vez de caer, estas parecen aumentar levemente durante ultimas dos décadas, manteniéndose a niveles extremos, por lo menos desde el año 2000.
Este documento presenta una revisión de las estadísticas distributivas en República Dominicana a partir de la combinación de distintas fuentes de información: encuestas de hogares, registros tributarios y cuentas nacionales. Es el resultado del proceso de colaboración en curso entre el Gobierno de la República Dominicana, la Comisión Económica para América Latina y el Caribe (CEPAL) y el World Inequality Lab (WIL), como parte del proyecto “Inequality: Innovative approaches for examining inequality through integration of different data sources” del 13er Tramo de la Cuenta para el Desarrollo de las Naciones Unidas. Se presentan estimaciones preliminares de la desigualdad del ingreso con base en (i) las encuestas de hogares, armonizadas por CEPAL; (ii) las encuestas ajustadas usando registros tributarios; (iii) las encuestas escaladas al ingreso de los hogares en cuentas nacionales; y, finalmente (iv) imputaciones de otros ingresos para llegar a la distribución del ingreso nacional. Se presenta asimismo una discusión exploratoria de las tendencias encontradas.
Diagnóstico Distributivo de Ingreso y Patrimonio, y Análisis de la Propuesta de Reforma Tributaria
Esta sección indaga en la propuesta de reforma del Impuesto al Patrimonio en Chile a finales del año 2022, introducida por el gobierno de Gabriel Boric. El equipo académico a cargo de este informe no participó en el diseño del proyecto de ley, por lo que el análisis de las propuestas se remite a estimaciones usando parámetros provistos por el Ministerio de Hacienda. La sección se estructura de la siguiente manera. Primero se describe brevemente la reforma. Luego se detalla en términos generales la metodología utilizada para realizar las estimaciones. Finalmente, se presentan y discuten los resultados.
Inequality in Latin America revisited: insights from distributional national accounts
This document provides an overview of the sources and methods behind the Distributional National Accounts (DINA) series presented in the World Inequality Database (WID.world, https://wid.world) for Latin America in the November 2020 update. Our estimates distribute total pre-tax national income to resident individuals, following the DINA guidelines. For that purpose, we combine a variety of data sources, namely harmonized household surveys, income tax records, social security registers, and national accounts. The available information allows us to study ten countries, covering around 80% of the region’s population over the last two decades.
Distributional National Accounts guidelines
The purpose of these Distributional National Accounts (DINA) guidelines is to present the concepts, data sources and methods used in the World Inequality Database (WID). The first version was published in 2016. This second edition constitutes the first major revision. These new guidelines have been reorganized for clarity, and extended with a lot of new and revised material. In recent years, the WIL has been leading efforts in creating “distributional national accounts.” The goal is to provide estimates of the distribution of income and wealth that are harmonized over time and across countries, that are consistent with the macroeconomic aggregates produced by national statistical institutes, and that can therefore be viewed as a distributional extension of the existing international System of National Accounts (SNA).
A project of the Stone Center at the City University of New York, aimed at expanding and consolidating access to the most up-to-date research and information on wealth, wealth inequalities, and wealth transfers and related tax policies, across countries and over time.
distributions.info (Coming soon)