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Unemployment Shocks and Income Distribution How Did the Nordic Countries Fare During their Crises?

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Author Info
Rolf Aaberge, Anders Björklund, Markus Jäntti, Peder J. Pedersen, Nina Smith and Tom Wennemo (Statistics Norway)

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Abstract

We analyse how inequality of disposable income evolved in Denmark, Finland, Norway and Sweden during the late 1980s and early 1990s when unemployment rose dramatically in all four countries. We find that a standard measure of inequality - the Gini coefficient - was surprisingly stable in all countries over this period. By decomposing the Gini coefficient into a number of income components, we can test hypotheses about the reasons for the stable income distribution. Our most straightforward hypothesis, that rising unemployment benefits have counteracted the impact of more unequally distributed earnings, gets only limited support. More complex mechanisms seems to have been at work in the Nordic countries.

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Paper provided by Research Department of Statistics Norway in its series Discussion Papers with number 201.

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Date of creation: Sep 1997
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Handle: RePEc:ssb:dispap:201

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Related research
Keywords: Unemployment; income inequality;

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Find related papers by JEL classification:
D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution

References listed on IDEAS
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  1. Dex, Shirley, et al, 1995. "Cross-National Comparisons of the Labour Force Participation of Women Married to Unemployed Men," Oxford Economic Papers, Oxford University Press, vol. 47(4), pages 611-35, October. [Downloadable!] (restricted)
  2. Rolf Aaberge and Iulie Aslaksen, 1996. "Decomposition of the Gini Coefficient by Income Components: Various Types of Applications and Interpretations," Discussion Papers 182, Research Department of Statistics Norway.
  3. Lerman, Robert I & Yitzhaki, Shlomo, 1985. "Income Inequality Effects by Income," The Review of Economics and Statistics, MIT Press, vol. 67(1), pages 151-56, February. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Espen Bratberg & Sigve Tjøtta, 2008. "Income effects of divorce in families with dependent children," Journal of Population Economics, Springer, vol. 21(2), pages 439-461, April. [Downloadable!] (restricted)
  2. Kjell G. Salvanes and Svein Erik Førre, 2001. "Job Creation, Heterogeneous Workers and Technical Change: Matched Worker/Plant Data Evidence from Norway," Discussion Papers 304, Research Department of Statistics Norway. [Downloadable!]
  3. Kjersti-Gro Lindquist and Terje Skjerpen, . "Explaining the change in skill structure of labour demand in Norwegian manufacturing," Discussion Papers 293, Research Department of Statistics Norway. [Downloadable!]
  4. Ferrarini, Tommy & Nelson, Kenneth, 2002. "Estimating Post-tax Social Insurance Benefits: Validity Problems in Comparative Analyses of Net Income Components from Household Income Data," Working Paper Series 6/2002, Swedish Institute for Social Research. [Downloadable!]
  5. Heikki Loikkanen & Marja Riihelä & Risto Sullström, 2003. "Regional income convergence and inequality in boom and bust. Results from micro data in Finland 1971-2000, and especially during the 1990s," ERSA conference papers ersa03p514, European Regional Science Association. [Downloadable!]
  6. Raaum,O. & Salvanes,K.G. & Sorensen,E.O., 2001. "The neighbourhood is not what it used to be : has there been equalisation of opportunity across families and communities in Norway," Memorandum 36/2001, Oslo University, Department of Economics. [Downloadable!]
  7. Bratberg, Espen & Nilsen, Øivind A. & Vaage, Kjell, 2003. "Assessing Changes in Intergenerational Earnings Mobility," IZA Discussion Papers 797, Institute for the Study of Labor (IZA). [Downloadable!]
  8. Rolf Aaberge and Anthony B. Atkinson, 2008. "Top Incomes in Norway," Discussion Papers 552, Research Department of Statistics Norway. [Downloadable!]
  9. Dolls, Mathias & Fuest, Clemens & Peichl, Andreas, 2009. "Automatic Stabilizers and Economic Crisis: US vs. Europe," IZA Discussion Papers 4310, Institute for the Study of Labor (IZA). [Downloadable!]
  10. Magne Mogstad, 2007. "Measuring Income Inequality under Restricted Interpersonal Comparability," Discussion Papers 498, Research Department of Statistics Norway. [Downloadable!]
  11. Gustavsson, Magnus, 2002. "Earnings Dynamics and Inequality during Macroeconomic Turbulence: Sweden 1991-1999," Working Paper Series 2002:20, Uppsala University, Department of Economics.
  12. Erik Fjærli and Rolf Aaberge, 2000. "Tax Reforms, Dividend Policy and Trends in Income Inequality Empirical Evidence based on Norwegian Data," Discussion Papers 284, Research Department of Statistics Norway. [Downloadable!]
  13. Erling Røed Larsen, 2002. "Consumption Inequality in Norway in the 80s and 90s," Discussion Papers 325, Research Department of Statistics Norway. [Downloadable!]
  14. Axel Dreher & Noel Gaston, 2006. "Has globalization increased inequality?," KOF Working papers 06-140, KOF Swiss Economic Institute, ETH Zurich. [Downloadable!]
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