Income inequality in France, 1901-1998

This paper uses data from income tax returns (1915-98), wage tax returns (1919-98), and inheritance tax returns (1902-94) in order to compute homogeneous, yearly estimates of income, wage, and wealth inequality for twentieth-century France. The main conclusion is that the decline in income inequality that took place during the first half of the century was mostly accidental. In France, and possibly in a number of other countries as well, wage inequality has been extremely stable in the long run, and the secular decline in income inequality is for the most part a capital income phenomenon. Holders of large fortunes were badly hurt by major shocks during the 1914-45 period, and they were never able to fully recover from these shocks, probably because of the dynamic effects of progressive taxation on capital accumulation and pretax income inequality.