The Problem With Income Inequality
I happened upon this piece yesterday from Scott Winship about some recent regressions he ran on cross-country income inequality. The bit relevant to my post here reads as follows:
My analyses focus on inequality before governments redistribute income through progressive taxes and cash transfers. Another reason that inequality does not tend to lead to lower living standards in the developed world is that below the top 1 percent, inequality before taxes and transfers does not vary much across rich countries. By the most used measure, inequality within the bottom 99 percent is barely higher in the United States than in Denmark.
Winship disagrees, saying that although he sort of said something as silly as this in the conclusion of his paper, it was a mistake and that this one mistake doesn't knock down the rest of the paper.
So I took a look at the rest of the paper to see whether this was the case. But it's not just a stray remark in the conclusion that goes down these muddled lines.
Right from the beginning, Winship explains:
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