The inequality trap A comparative analysis of social spending between 1880 and 1933

Abstract

Using two alternative indicators of redistribution -social transfers and social spending- over the time-period 1880-1933 and using two alternative proxies for inequality -the percentage of non-family farms and the top income shares-, this paper shows that, contrary to what many studies on the origins of the welfare state appear to implicitly suggest, inequality did not favour the development of social policy even in its early stages. Since social policy developed more easily in countries that were previously more egalitarian, it seems that unequal societies were in a sort of inequality trap, where inequality itself was an obstacle to redistribution.comparative economic history, inequality, social policy, redistribution