Commentary: The Distribution of Income in Industrialized Countries

Tony Atkinson has produced a first-rate paper carefully documenting recent trends in the distribution of income and earnings in advanced industrial nations. He demonstrates the important point that there is considerable heterogeneity among Organization for Economic Cooperation and Development (OECD) nations in both the level of economic inequality and in changes in the dispersion of income and earnings in the 1980s and 1990s. His paper also clearly shows that differences in income distribution among G-7 nations are sufficiently large to imply substantial consequences for living standards. The bottom quintile of the family income distribution appears to have lower real disposable income in the United States than in Germany, despite substantially higher mean incomes in the United States. The earnings of low-wage U.S. workers appear to be lower in PPP-adjusted real dollars than those of workers similarly situated in the earnings distribution in advanced Europe (Freeman, 1998).