Wars and episodes of violent disruption have often been associated with reductions in economic inequality, but the underlying dynamics and mechanisms are less understood. This paper explores World War II's effect on the income distribution in Norway. We use a newly digitized individual-level panel of tax records and document a large decline in income inequality in Norway that occurred during and after World War II and persisted until the 1980s. We descriptively show that the decline is driven by large increases in the incomes of the bottom 50 percent of the income distribution and, to a smaller degree, reductions among the very rich. Using a shift-share design, we show that more than half the decline in inequality during the war is caused by large increases in the prices of agricultural products and fish. We further identify the effect of massive investments in fortifications, airports, and war-related manufacturing on local labor markets. While the total effects vary by investment type, the investments disproportionally increased incomes for workers with low skills or low incomes before the war. Our analysis provides an alternative narrative by centering on the bottom 50 percent of income earners, contrasting with studies focusing primarily on the top income shares and capital destruction during wartime.

This paper generates new insights into the effect of education on fertility and partner choice across multiple generations. Using an intensity-of-treatment design, we leverage population-wide panel data for Norway in combination with a school reform in the 1930s, changing the instruction time during the school year in rural municipalities. The reform was binding for most of the rural population and allows us to estimate the effect of education on fertility behavior across the life-cycle, partner choice, and spillover effects on the next generation's fertility. We present robust evidence of reduced total fertility and an increase in the age at first birth driven by increased years of education, better labor market outcomes, and mating with better-educated partners. In addition, the reform also affected the fertility behavior of the children and decreased fertility rates across multiple generations.

High-quality administrative tax data has been instrumental in advancing economic research over the past several decades. However, the scarcity of data prior to the 1970s has posed a significant obstacle to the study of the distribution of economic outcomes across people and generations in historical settings. We introduce a data set extending Norwegian tax records to the early 1900s, digitizing more than 270,000 pages. The data set includes most Norwegian regions and data on name, occupation, place of residence, income, and wealth. We link observations across years to significantly enhance the usefulness of the data. We argue that the methodologies employed in this paper offer significant potential for application to a wider range of sources and countries.

We estimate the complete income distribution in Norway for 1892, 1906, 1913 and 1929. Compared to previous research, we benefit from better data and more advanced estimation techniques. Our thesis identifies several data weaknesses which have caused bias in previous studies. Much of the data previously used does not distinguish between individual taxpayers and impersonal entities such as stock companies and banks. Another weakness is that before 1921, dividends were not included in the income data. For 1929, the data allows us to create local-level estimates for each Norwegian municipality. We find that the pre-tax, pre-transfers Gini index is stable for the years we analyse, starting at 52 percent in 1892 and ending at 54 percent in 1929. The top 1% income share before taxes and transfers falls over time, declining from 19 percent in 1892 to 12 percent in 1929. We find that shocks to wealth might play a role in this development. Our results differ significantly from those of previous studies. First, we find a Gini index lower than Aaberge, Atkinson and Modalsli (2016). Second, we find lower top incomes and a different development over time than Aaberge, Atkinson and Modalsli (2013). Our results suggest that Norway was already among the most egalitarian countries in Western Europe between 1892 and 1929 in terms of income. However, our estimates are sensitive to total income and to the estimation of stock dividends. Historical estimates from other countries are likely to be sensitive too, leaving a considerable risk of error when comparing.