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Income Distribution and Poverty in the OECD Area: Trends and Driving Forces

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  • Michael Förster
  • Mark Pearson

Abstract

This article uses internationally-comparable data on the distribution of income across households to identify some well-founded facts to replace the conjecture and supposition which too often dominate discussions on inequality and poverty. There has been a general trend in nearly all OECD countries towards increased market income (earnings and income from capital) inequality between the mid-1970s and the mid-1990s. However, in a significant minority of countries this has not resulted in higher levels of inequality because either the amounts distributed through the tax and transfer system have increased, or because it has become more progressive. Changes in income distribution in the past ten years generally favoured the prime-age and elderly age groups, particularly those around retirement age. Relative income levels of single parents are very low and have worsened in a number of countries. Trends in earned income, and in particular trends in employment, are found to be crucial in explaining these changes.

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File URL: http://dx.doi.org/10.1787/eco_studies-v2002-art2-en
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Bibliographic Info

Article provided by OECD Publishing in its journal OECD Economic Studies.

Volume (Year): 2002 (2002)
Issue (Month): 1 ()
Pages: 7-38

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Handle: RePEc:oec:ecokaa:5lmqcr2k2c8q

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Cited by:
  1. Caroline Dewilde, 2011. "GINI DP 18: The interplay between economic inequality trends and housing regime changes in advanced welfare democracies," GINI Discussion Papers 18, AIAS, Amsterdam Institute for Advanced Labour Studies.
  2. Georgia Kaplanoglou, 2004. "Household Consumption Patterns, Indirect Tax Structures and Implications for Indirect Tax Harmonisation - A Three Country Perspective," The Economic and Social Review, Economic and Social Studies, vol. 35(1), pages 83-107.
  3. Tim Krieger & Daniel Meierrieks, 2009. "Terrorism in the Worlds of Welfare Capitalism," Working Papers 22, University of Paderborn, CIE Center for International Economics.
  4. Gudrun Biffl, 2003. "Distribution of Household Income in Austria," WIFO Working Papers 214, WIFO.
  5. Caminada, Koen & Goudswaard, Kees, 2008. "Effectiveness of poverty reduction in the EU: A descriptive analysis," MPRA Paper 20167, University Library of Munich, Germany.
  6. Schmid, Erwin & Sinabell, Franz & Hofreither, Markus F., 2006. "Distributional effects of CAP instruments on farm household incomes in Austria," 2006 Annual meeting, July 23-26, Long Beach, CA 21467, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  7. Ioannidis, Yiorgos, 2013. "The peculiar distributional character of the Greek taxation system (1995‐2008) and the reform that never took place," MPRA Paper 52121, University Library of Munich, Germany.
  8. Ådne Cappelen, 2006. "Differences in Learning and Inequality," Discussion Papers 457, Research Department of Statistics Norway.
  9. Richard Burkhauser & Takashi Oshio & Ludmila Rovba, 2006. "How the Distribution of After-Tax Income Changed Over the 1990s Business Cycle: A Comparison of the United States, Great Britain, Germany and Japan," Working Papers wp145, University of Michigan, Michigan Retirement Research Center.
  10. Caminada, Koen & Goudswaard, Kees & Koster, Ferry, 2010. "Social income transfers and poverty alleviation in OECD countries," MPRA Paper 20733, University Library of Munich, Germany.
  11. Wolfgang Pollan, 2009. "How large are wage differentials in Austria?," Empirica, Springer, vol. 36(4), pages 389-406, November.
  12. Canares, Michael, 2009. "Macro-economic trends and their impacts on forests and forestry in Asia and the Pacific, outlook to 2020," MPRA Paper 28970, University Library of Munich, Germany.
  13. Caminada, Koen & Goudswaard, Kees, 2009. "Social expenditure and poverty reduction in the EU15 and other OECD countries," MPRA Paper 20138, University Library of Munich, Germany.
  14. Thomas Leoni & Wolfgang Pollan, 2003. "The Impact of Inequality on Economic Growth," WIFO Working Papers 211, WIFO.
  15. Gudrun Biffl, 2007. "Development of the Distribution of Household Income in Austria," WIFO Working Papers 293, WIFO.
  16. Productivity Commission, 2006. "The Role of Non-Traditional Work in the Australian Labour Market," Research Papers 0601, Productivity Commission, Government of Australia.
  17. Sung Yeung Kwack & Young Sun Lee, 2007. "The Distribution And Polarization Of Income In Korea, 1965-2005: A Historical Analysis," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 32(2), pages 1-39, December.
  18. Bank for International Settlements, 2010. "Globalisation, labour markets and international adjustment - Essays in honour of Palle S Andersen," BIS Papers, Bank for International Settlements, number 50, 3.
  19. Callan, Tim & Keeney, Mary J. & Nolan, Brian & Maitre, Bertrand, 2004. "Why is Relative Income Poverty so High in Ireland?," Research Series, Economic and Social Research Institute (ESRI), number PRS53.

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