Post-Colonial Trends of Income Inequality in The Overseas Departments of France

Most ex-colonies have gained their independence during the decolonization wave in the last century. Recent research on the colonial legacy in terms of inequality has thus mostly focused on these independent states, overlooking the few territories which were assimilated by their ex-colonizers. This paper analyzes the post-colonial inequality in four such territories- La Reunion, Guadeloupe, Martinique and Guyane. Despite the explicit aim of decolonization as being a rupture with their unequal colonial past, these territories have since witnessed ongoing protests and riots due to the perceived high level of socioeconomic disparities. Drawing on a new income tax dataset put together in this paper, I study the evolution of income inequality in the four oldest French colonies, now overseas departments of France, since their decolonization in 1946 until recent years. The results of the top 1\% income shares reveal an inverted-U shaped curve of inequality since decolonization. Despite the rapid decline in the level of inequality and the general catch-up of the overseas departments, the top 10\% income share remained consistently higher than in the metropolis. Going further, I investigate the hidden underlying cleavage: the metropolitan-native divide. Matching fiscal data of 2014 to the corresponding population census, I show that metropolitans are over-represented in the top of the distribution and that there exist a ``metropolitan income premium" in the overseas departments, even after controlling for observable characteristics