Linking National and Regional Income Inequality: Cross-Country Data Harmonization and Analysis

Academic research has highlighted the rise of income inequality, particularly the increase of top 1% income share, and the associated social, economic and political problems. It is becoming increasingly clear that these national income inequalities are driven in part by income inequalities within countries, with a divide between the ‘superstar’ global cities (London, Paris, New York) and ‘left behind’ ex-industrial towns. I am part of an international team that has recently been awarded an ‘Open Research Area’ grant to examine trends in geographic income inequality across five high-income countries – Canada, France, Germany, the United Kingdom and the United States – since the 1970s.

The first objective of our research is to develop a method for analysing geographic income inequality in a way that can be compared between countries. We will tackle three problems: defining comparable geographic areas, creating consistent measures of income and adjusting incomes for the varied local cost of living (e.g. housing costs). We will use data from national tax records, from registries of workers’ earnings and household surveys. Our second objective is to assess the importance of geographic inequalities in driving national income inequalities across our five study countries. Third, we will analyse the common trends and differences between and within countries, and investigate the drivers of these trends. Our final objective is to use this project as the foundation of a global database that provides information about inequalities between places. Our vision is that this will act as a point of information for researchers to study the causes and consequences of geographic income inequality, and for policymakers to understand how their country compares to others.

This project starts in January 2021 and runs for three years; the project is therefore at the startup stage and so I welcome comments and advice from colleagues about the scope of our proposed work and the methods we are intending to employ.