In the 1950s, economist Simon Kuznets noticed the outlines of a great arc in historical economic data: As countries start to industrialize, the rich get richer, but as economies develop further, the poor and middle classes begin to catch up, and inequality declines. Kuznets also jump-started the scientific approach to economic development with this groundbreaking 1955 paper on growth and inequality. While Kuznets realized the limited applicability of his observations to the broad mass of poor countries, many developmental economists took his insights as gospel. getAbstract recommends this classic paper to students of economic history.
In this article, you will learn
- Why advanced economies saw an unexpected lessening of income inequality early in the 20th century,
- What factors accounted for that rebalancing and
- How developing economies’ growth trajectories may differ.
About the Author
Simon Kuznets (1901–1985) received the 1971 Nobel Memorial Prize in Economic Sciences. He pioneered the use of demographics and statistics in economics and the study of income inequality.