Introduction / 1. The Measurement of Inequality and Its Evolution / Different Types of Income / Wage Inequality / International Comparisons / Income Inequality / International Comparisons / Inequalities in Time and Space / The Historical Evolution of Inequality / From Laws of History to Uncertainties / From Wages to Incomes / Inequality with Respect to Employment / 2. Capital-Labor Inequality / The Share of Capital in Total Income / The Question of Capital/Labor Substitution / What Capital/Labor Substitution Means / Redistribution: “Fiscal” or “Direct”? / The Elasticity of Substitution between Capital and Labor / The Elasticity of Capital Supply / Are Capitalists and the Price System Necessary? / A Compromise between Short-Term and Long-Term Theories? / From Share of Value-Added to Household Income / What the Constancy of the Profit Share Tells Us / Who Pays Social Charges (Payroll Taxes)? / A Cobb-Douglas Production Function? / Historical Time versus Political Time? / Why Has the Profit Share Not Increased in the United States and United Kingdom? / The Dynamics of the Distribution of Capital / The Theory of Perfect Credit and Convergence / The Question of Convergence between Rich and Poor Countries / The Problem of Capital Market Imperfections / Possible Public Interventions / A Flat Tax on Capital? / 3. Inequality of Labor Income / Inequality of Wages and Human Capital / The Explanatory Power of the Theory of Human Capital / Important Historical Inequalities / Supply and Demand / The Rise of Wage Inequality since 1970 / Skill-Biased Technological Change? / Wage Inequality and Globalization / How to Redistribute Labor Income / A Major Political Issue / Where Does Human Capital Inequality Come From? / Efficient Inequality? / The Role of the Family and Educational Expenses / The Problem of Inefficient Segregation of Human Capital / Discrimination in the Labor Market / Affirmative Action versus Fiscal Transfers / The Social Determination of Wage Inequality / The Role of Unions in Setting Wages / Unions as Substitutes for Fiscal Redistribution? / Do Unions Contribute to Economic Efficiency? / The Monopsony Power of Employers / When Does a Higher Minimum Wage Increase the Level of Employment? / Efficiency Wages and Fair Wages / National Traditions and Wage Inequality / 4. Instruments of Redistribution / Pure Redistribution / Average and Marginal Rates of Redistribution / The Absence of Redistribution between Workers / The U-Shaped Curve of Marginal Rates / Just Fiscal Redistribution / Do High Taxes Diminish Revenue? / The Earned Income Tax Credit in the United States / Fiscal Redistribution to Reduce Unemployment? / Negative Income Tax and Basic Income / Efficient Redistribution / Redistribution and Social Insurance / Efficient Social Insurance / Is Social Insurance an Instrument of Fiscal Redistribution? / Redistribution and Demand / References / Index
Thomas Piketty, whose Capital in the Twenty-First Century pushed inequality to the forefront of public debate wrote The Economics of Inequality as an introduction to the conceptual and factual background necessary for interpreting changes in economic inequality over time. This concise text has established itself as an indispensable guide for students and general readers in France, where it has been regularly updated and revised.
Translated by Arthur Goldhammer, The Economics of Inequality now appears in English for the first time. Piketty begins by explaining how inequality evolves and how economists measure it. In subsequent chapters, he explores variances in income and ownership of capital and the variety of policies used to reduce these gaps. Along the way, with characteristic clarity and precision, he introduces key ideas about the relationship between labour and capital, the effects of different systems of taxation, the distinction between historical and political time, the impact of education and technological change, the nature of capital markets, the role of unions, and apparent tensions between the pursuit of efficiency and the pursuit of fairness.
Succinct, accessible, and authoritative, this is the ideal place to start for those who want to understand the fundamental issues at the heart of one the most pressing concerns in contemporary economics and politics.
Thomas Piketty is Professor at the Paris School of Economics.