Hi IWG members,
Our upcoming webinar will includes two presentations on Top Incomes in Ivory Coast and Brazil. Co-hosted by the African and Latin American Working Group.
The event is organized by IWG members Giacomo Gabbuti and Marc Morgan-Milá.
Please join us on Thursday December 8th (12PM EST/17PM GMT/ 18PM CET) by clicking on this link:
https://global.gotomeeting.com/join/389118765
- Speaker Bios and Abstracts
Léo Czajka: 'Combining Fiscal and Survey Data to Measure Inequality in a Developing Country: The Case of the Ivory Coast in 2014'
Léo Czajka is a recent masters graduate of the Paris School of Economics (PSE). He is currently a research assistant for the World Wealth and Income Database (wid.world) project at PSE, working on income inequality in Sub-Saharan Africa.
Abstract
Until very recently, data on income distribution in Sub-Saharan Africa has been mainly used to estimate poverty rates. Yet, the rapid growth experienced by several countries in the last two decades suggests looking beyond the bottom of the income distribution. All existing studies on income concentration in Sub-Saharan Africa rely solely on survey data, but due to under declaration or under sampling biases, such instruments often fail to accurately measure the income of the wealthiest individuals. Furthermore little is known about the size of such biases as it requires to have access to more reliable sources of information, which are particularly scarce across the continent. In this presentation, we will first describe what we know about inequality in Sub-Saharan Africa and why it would deserve to be further studied. Then we will confront survey data with first-hand income tax files in the case of Ivory Coast in 2014 and illustrate how they can diverge. Finally we will correct survey data using the information provided by the tax files. Our results show that the 2014-2015 survey underestimated the Gini coefficient by about 4-5 points, and the top 1 per cent share by at least 6 percentage points.
Marc Morgan-Milá: 'Income Concentration and Elite Taxation in Brazil: An Investigation of Personal Income Tax Records, 2007–2014'
Marc Morgan-Milá is a PhD student at the Paris School of Economics (PSE), working on economic distribution at the microeconomic and macroeconomic levels and the political economy of institutional history in countries as distinct as Brazil and Ireland.
Abstract
This presentation uses personal income tax records to study income concentration at the top of the distribution in Brazil over recent history. Three questions are asked: (1) what does income concentration in Brazil look like and how does it compare to other countries? (2) Which income groups captured most of the growth over the period and what types of occupations comprise these groups? (3) How progressive is the personal income tax in Brazil? The findings confirm Brazil’s status as one of the world’s most unequal countries, with concentration levels at the top similar those observed in countries like Colombia, South Africa and the United States. The richest 1 per cent of the distribution received an average of 22 percent of total household income over the period between 2007 and 2014, reaching a peak of 24 percent in 2008, and declining since. This decline in concentration reflects that over the period the bottom 99 per cent received a higher fraction of total real income growth than the top 1 per cent. But concentration of income at the top remains exceptionally high, with corporate capital owners and high-rank civil servants dominating the summit of the distribution. The majority of the income of the very rich in Brazil is not subject to the personal income tax. This explains their low effective tax liability and illustrates that the personal income tax is not a progressive policy tool in Brazil, violating the principles of horizontal and vertical equity.