IDEAS home Printed from
   My bibliography  Save this paper

Trends in top income shares in Finland 1966-2007


  • Sullström, Risto
  • Riihelä, Marja
  • Tuomala, Matti


This paper provides new evidence about the evolution of top incomes in Finland over the period 1966–2007. Using micro data we construct estimates of shares of top income groups. The paper shows how the proportion of income earned by the very richest one per cent has changed over time. It shows a U-shaped pattern over this period. The total share of the highest earners fell consistently between the mid 1960s and the beginning of the 1990s but then began to rise. The results bring out clearly how the major equalization from the mid 1960s to the mid 1990s has been reversed, taking the shares of top income groups back to levels of inequality or even higher found 40 years ago. The main factor that has driven up the top one per cent income share in Finland after the mid 1990s is in an unprecedented increase in the fraction of capital income which is in 2007 62 per cent of incomes in the top one per cent group. In 1990 this fraction was 14 per cent. Therefore the composition of high incomes at the end of period considered is very different from those earlier years of this period. We argue in this paper that the 1993 tax reform has contributed to this trend. Our results suggest that tax reform has declined tax progressivity and increased top income shares in Finland.

Suggested Citation

  • Sullström, Risto & Riihelä, Marja & Tuomala, Matti, 2010. "Trends in top income shares in Finland 1966-2007," Research Reports 157, VATT Institute for Economic Research.
  • Handle: RePEc:fer:resrep:157

    Download full text from publisher

    File URL:
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    1. Seppo Laaksonen, 1989. "Use of panel data in applications of income dynamics," Finnish Economic Papers, Finnish Economic Association, vol. 2(1), pages 55-64, Spring.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Roberto Iacono, 2019. "The Norwegian Oil Bonanza and the Scandinavian Model in Comparative Perspective," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 61(1), pages 63-82, March.
    2. Christoph A. Schaltegger & Christoph Gorgas, 2011. "The Evolution of Top Incomes in Switzerland over the 20th Century," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 147(IV), pages 479-519, December.
    3. Sami Remes, 2022. "Decomposition of the Shrinking Middle-class and Directional Mobility in Finland 1995–2012," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 162(3), pages 1281-1312, August.
    4. Iacono Roberto & Palagi Elisa, 2022. "Still the Lands of Equality? Heterogeneity of Income Composition in the Nordics, 1975–2016," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 22(2), pages 221-268, April.
    5. Lehmus, Markku, 2014. "Distributional and employment effects of labour tax changes in Finland," Journal of Policy Modeling, Elsevier, vol. 36(1), pages 107-120.
    6. Steven Pressman, 2013. "Justice and History: the big problem of Wilt Chamberlain," Economic Issues Journal Articles, Economic Issues, vol. 18(1), pages 1-16, March.
    7. Rolf Aaberge & Anthony B. Atkinson & Sebastian Königs, 2018. "From classes to copulas: wages, capital, and top incomes," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 16(2), pages 295-320, June.
    8. Tuominen Elina, 2016. "Top-end inequality and growth: Empirical evidence," Working Papers 1608, Tampere University, Faculty of Management and Business, Economics.
    9. Atanu Ghoshray & Issam Malki & Javier Ordóñez, 2022. "On the long-run dynamics of income and wealth inequality," Empirical Economics, Springer, vol. 62(2), pages 375-408, February.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.


      All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fer:resrep:157. See general information about how to correct material in RePEc.

      If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

      If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

      If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

      For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Anita Niskanen (email available below). General contact details of provider: .

      Please note that corrections may take a couple of weeks to filter through the various RePEc services.

      IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.