Thread by @BrankoMilan

Summary of the Ranaldi-Milanovic paper.
We distinguish btw
1 compositional inequality (are there people receiving only income from K & everybody else gets wages only; or is everyone getting the same shares of their income from L and K),
and
2 inter-personal inequality (Gini).

High compositional inequality is associated w/ high Gini. Not surprising. If you have on one side people receiving income from K only, and everybody else gets just wages, inter-personal inequality is likely to be high. Examples are LatAm & India.

Nordic countries are exceptional because they combine high compositional inequality with low inter-personal inequality. So they are (what we call) "hidden class societies". Their low inequality is due to wage compression.

However, once we introduce income from private pensions (which is K income), the situation changes because such income is widespread (across full distribution) in Nordic countries: compositional inequality drastically falls.

Theoretically, you could have a society of low compositional inequality (everybody gets K and L income), but high Ginis. In reality, we do not find such societies although China and US come closest to that.
Interestingly,Taiwan is less "class--based" than China.

So there is a nice taxonomy of capitalisms and a methodological innovation.
Here is the paper (published today):
sciencedirect.com/science/articl…