While analyzing income inequality using US tax data in the 1950s, Simon Kuznets found a relationship between sectoral change from agrarian to industrial economy and income inequality. During the sectoral change a cycle of economic inequality occurs, which can be described with an inverted U curve known as Kuznets curve. The process is driven by the demand of skilled labour forces, which exceeds the supply at the beginning of the change. This temporarily leads to higher income inequality. Later on, after labor demand and supply find an equilibrium, income inequality again drops. Because of the simplicity of the argument the Kuznets curve is still a relevant starting point for scholars investigating income inequality, even though there exist other factors which affect income inequality.
Following the idea of Kuznets, we explore how sectoral change affected income inequality in Switzerland. We focus on recent decades, where Switzerland experienced a shift towards a service bases economy. Is the tertiarisation of Switzerland associated to income inequality and if yes, how?
In the tradition of Kuznets we work with tax data from Swiss Federal Tax Administration and with tax data, which we collected from Swiss cantonal tax authorities. The data is collected within a research project about inequality in income and wealth in Switzerland, which is financed by the Swiss National Science Foundation. Because tax data covers the whole population of Switzerland, it allows us to analyze income inequality without sample bias from non-response. To make the data accessible in a "playful" manner, we programmed several interactive graphs, which allow interested persons to explore the data on their own.