Abstract.
This
paper presents new estimates of income inequality derived from Prussian tax
statistics for the years 1822-1914. Confidence intervals are also calculated.
The results show a rise in inequality in the nineteenth century, with a peak
around 1906, thus supporting the view put forward by Simon Kuznets that
industrialisation will initially lead to a rise in inequality. The paper goes
on to consider whether this was due to factors which were particular to Germany
in the period, or whether the Kuznets curve is the result of forces which
affect all industrialising societies. The conclusion reached is that the
Kuznets curve is an avoidable trap, not
an automatic consequence of industrialisation.