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Inequality in Greece: an analysis by income source

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  • Papatheodorou, Christos

Abstract

This paper employs a decomposition analysis of inequality by income source to understand and explain particular aspects of income inequality in Greece. The results suggest that entrepreneurial income is the most significant contributor to overall inequality in Greece. It is also shown that there is a weak redistributive impact of taxes and social security contributions and this is mainly attributed to tax evasion, particularly in entrepreneurial income. The decrease of the inequality of entrepreneurial income appears to be the most effective way of reducing total inequality. Overall this analysis may help to establish links between the functional and personal income distribution. Therefore, our ability to evaluate and predict the potential implications of particular growth policies to inequality, poverty and, consequently, to social development, is significantly improved.

Suggested Citation

  • Papatheodorou, Christos, 1998. "Inequality in Greece: an analysis by income source," LSE Research Online Documents on Economics 6594, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:6594
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    File URL: http://eprints.lse.ac.uk/6594/
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    References listed on IDEAS

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    1. Sen, Amartya, 1997. "On Economic Inequality," OUP Catalogue, Oxford University Press, number 9780198292975.
    2. Shorrocks, A F, 1982. "Inequality Decomposition by Factor Components," Econometrica, Econometric Society, vol. 50(1), pages 193-211, January.
    3. Anthony F. Shorrocks, 1983. "The Impact of Income Components on the Distribution of Family Incomes," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 98(2), pages 311-326.
    4. Adams, Richard H. Jr. & He, Jane J., 1995. "Sources of income inequality and poverty in rural Pakistan:," Research reports 102, International Food Policy Research Institute (IFPRI).
    5. Jenkins, Stephen P, 1995. "Accounting for Inequality Trends: Decomposition Analyses for the UK, 1971-86," Economica, London School of Economics and Political Science, vol. 62(245), pages 29-63, February.
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    Cited by:

    1. Thi Cam Van Cao & Takahiro Akita, 2008. "Urban and Rural Dimensions of Income Inequality in Vietnam," Working Papers EMS_2008_04, Research Institute, International University of Japan.
    2. Andriopoulou, Eirini & Karakitsios, Alexandros & Tsakloglou, Panos, 2017. "Inequality and poverty in Greece: Changes in times of crisis," GLO Discussion Paper Series 119, Global Labor Organization (GLO).
    3. George Petrakos & Konstantinos Rontos & Chara Vavoura & Ioannis Vavouras, 2023. "The Impact of Recent Economic Crises on Income Inequality and the Risk of Poverty in Greece," Economies, MDPI, vol. 11(6), pages 1-23, June.

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    More about this item

    Keywords

    Inequality; income distribution; decomposition analysis; income sources; income taxes; tax evasion; development; Greece;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance

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