INCOME INEQUALITY TRENDS IN THE 1980S - A 5-COUNTRY COMPARISON

This paper compares recent developments in income inequality in Canada , Germany, Sweden, the United Kingdom, and the United States. In addit ion to describing cross-national variation in changes in income inequa lity, the paper examines different explanatory factors for these recen t developments. The findings reported indicate that there is substanti al cross-national variation, not only with regard to the level of ineq uality, but furthermore with regard to changes in inequality. The resu lts indicate that the equalizing effect of welfare state redistributio n did not decrease in all countries. By contrast, in all countries the re was a universal tendency towards increased inequality in the pre-ta x and transfer distribution, although the magnitude of the change diff ers from country to country. Even though a polarization of the earning s distribution is reported, the results still give no support to cross -national convergence with regard to income inequality during the 1980 s.