Predistribution versus Redistribution: Evidence from France and the United States

The authors compile time series of after-tax income for France over the period 1900–2018 and compare them with those for the United States. They measure the extent of redistribution — that is, the reduction in pre-tax inequality relative to post-tax inequality — and estimate the contribution of redistribution to explaining differences in post-tax inequality. The authors find that differences in pre-tax inequality account for the bulk of the differences in post-tax inequality between France and the United States, and that the trends observed over time in both countries are mainly due to changes in pre-tax inequality. The authors emphasise that the concept of redistribution can be misleading from an empirical perspective when evaluating the extent to which policies reduce inequality.