Unpacking transatlantic income inequality.

Disposable income inequality among working-age people (ages 25–60) shows strong convergence across 17 North American and European countries from 1995–2021, despite divergent market-income dispersion.

• Why it matters: Cross-country comparisons of income inequality have been hard because data are not consistently harmonized, leaving uncertainty about whether inequality levels converge and how redistribution shapes differences.
• What they did: Using newly harmonized survey and register data, the study tracks trends in demographically adjusted disposable income inequality, decomposing it into market income inequality and redistribution via taxes and transfers, and tests for convergence across countries.
• The result: Redistribution’s dispersion converges strongly, while market-income dispersion diverges due to heterogeneous trends in hours worked and household worker counts; Nordic inequality-reducing redistribution falls, others rise, yielding more similar countries, lower average redistribution, higher average disposable inequality driven by the bottom 95%.

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