The International Evidence on Income Distribution in Modern Economies: Where Do We Stand?

Abstract

Interest in cross-national comparison of personal income distributions, low relative incomes, and income inequality in general has grown dramatically during the past five years. Interest in cross-national distribution research did not come about by accident; several factors helped propel this line of research in the 1980s and 1990s. First of all, income distributions in the United States, the United Kingdom, and in several other nations began to trend toward greater inequality in a systematic and secular pattern, and the inequality-generating pressures of a rapidly internationalizing highly technical economy were felt in several modern nations. Second, the former state socialist nations of Central and Eastern Europe (CEE) began a still continuing process of economic and social adjustment and transition to a new socioeconomic order. While this transition is still underway, CEE nations have experienced large changes in both real income levels and in income distribution. Third, along with the rise in inequality, a growing interest in the question of ‘fairness’ vis-à-vis ‘budget pressures’ was present in the national political debates of the late 1980s and early 1990s, thus making ‘income distribution’ a legitimate realm of political inquiry.