Where Is The Middle Class? Inequality, Gender And The Shape Of The Upper Tail From 45 Million English Death And Probate Records, 1892-1992

Neil Cummins of LSE analyses a newly constructed individual-level dataset of every English death and probate from 1892-1992.

The estimated top wealth shares match closely existing estimates. However, his analysis clearly shows that the 20th century’s ‘Great Equalization’ of wealth stalled in mid-century. The probate rate, which captures the proportion of English with any significant wealth at death rose from 10% in the 1890s to 40% by 1950 and has stagnated to 1992. Despite the large declines in the wealth share of the top 1%, from 73% to 20%, the median English person died with almost nothing throughout. All changes in inequality after 1950 involve a reshuffling of wealth within the top 30%. Further, it is found that a log-linear distribution fits the empirical data better than a Pareto power law. Finally, his study shows that the top wealth shares are increasingly and systematically male as one ascends in wealth, 1892-1992, but this has equalized over the 20th century.Many episodes of discrimination have led to the exclusion of highly qualified individuals from important positions in the economy. This workshop explores how we may quantify economic losses resulting from these episodes. Specifically, Professor Fabian Waldinger investigates how the forced removal of managers with Jewish origins in Nazi Germany affected large firms.The loss of Jewish managers significantly reduced the stock prices of affected firms, for at least 10 years after the Nazis came to power. Professor Fabian Waldinger’s paper finds strong stock price reductions for firms where the removal of the Jewish managers led to large decreases in managerial connections to other firms and in the number of university-educated managers. Dividend payments and returns on assets also declined. A back-of-the-envelope calculation suggests that the aggregate market valuation of firms listed in Berlin fell by 1.8 percent of German GNP. His findings imply that discrimination can lead to first-order economic losses.

Update:

Arthur H. Cole Prize for the outstanding article
Neil Cummins, London School of Economics, was awarded the Arthur H. Cole Prize for the outstanding article “Where Is the Middle Class? Evidence from 60 Million English Death and Probate Records, 1892–1992” published in the June 2021 issue of The Journal of Economic History. The editorial board selected the winner.