Wealth Inequality in the Netherlands, c. 1950-2015. The Paradox of a Northern European Welfare State

Bas Van Bavel; Ewout Frankema

doi:10.18352/tseg.916

Author(s)

Bas Van Bavel Utrecht University
Ewout Frankema Wageningen University

DOI:

https://doi.org/10.18352/tseg.916

Keywords:

Inequality

Abstract

This paper reviews the available evidence on post-war trends in Dutch private wealth inequality using a range of scattered sources. Wealth tax records suggest a substantial decline in inequality to the 1970s and, more tentatively, a gradual rise thereafter. In the post-1990 years, Gini-coefficients of private wealth inequality range from 0.8 to 0.9, which is at the high end of the international comparison. Such high levels of private wealth inequality contrast with relatively low levels of net income inequality; a paradox that the Netherlands share with other Northern European welfare states. We hypothesise that publicly funded life-time income security limits the wealth-formation by ordinary Dutch households, while the redistributive taxes required to finance this system are targeting income rather than wealth.

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Author Biographies

Bas Van Bavel, Utrecht University

Bas van Bavel (1964) was appointed professor of Economic and Social History of the Middle Ages at Utrecht University in 2007. His research is focused on the long term development of societies and aimed at explaining the striking differences in their developmental path. In 2014, he was appointed distinguished faculty professor of “Transitions of Economy and Society”. He is the academic director of the interdisciplinary strategic theme of Utrecht University, “Institutions for Open Societies”, and elected member of the Royal Dutch Academy of Arts and Sciences and the Academia Europaea. He recently started a ERC-funded project, called “Coordinating for life”, on the resilience of societies and its determinants. Major publications include: Bavel, Bas van, The Invisible Hand? How Market Economies have Emerged and Declined since ad 500 (Oxford: Oxford University Press 2016), and Bavel, Bas van, Manors and Markets. Economy and Society in the Low Countries, 500-1600 (Oxford: Oxford University Press 2010).
Ewout Frankema, Wageningen University

Ewout Frankema (1974) is professor and chair of Rural & Environmental History at Wageningen University, research fellow of the Centre for Economic Policy Research (CEPR) and elected member of the Young Academy of the Royal Dutch Academy of Arts and Sciences. His research agenda focuses on a deeper understanding of the long-term comparative economic development of developing regions (Africa, Latin America, Asia) and the historical origins and nature of present-day global inequality. In 2012 he was awarded an NWO Vidi Grant for the project Is Poverty Destiny? Exploring Long Term Changes in African Living Standards in Global Perspective and an ERC Starting Grant for his project Is Poverty Destiny? A New Empirical Foundation of Long Term African Welfare Analysis.