E-frame conference, Paris, 26-28 June 2012

Income inequalities

Denis Leythienne and Liviana Mattonetti (Eurostat)

E-frame conference, Paris, 26-28 June 2012

I. MILESTONES

2007: ‘Beyond GDP’ Conference (OECD/EC/EP/Club of Rome/WWF).

2008/2009: Stiglitz/Sen/Fitoussi Commission on the ‘Measurement of Economic Performance and Social Progress’. Communication of the Commission: ‘Beyond GDP’

2010: The European Council adopts Agenda 2020 for a ‘smart, sustainable and inclusive growth’

2011: Report of the ESS Sponsorship on SSF recommendations

2012: First implementation of ESS / Sponsorship recommendations in the field of material wellbeing

E-frame conference, Paris, 26-28 June 2012

II. EUROPEAN RECOMMENDATIONS

Main indicator of material wellbeing:

Household Gross Disposable Income (GDI)

Adjusted for social transfers in kind

(Goods and services in health, education etc… financed by government)

In real terms

(in PPS / deflated for comparisons over space / time)

Per capita (ideally per consumption unit)

E-frame conference, Paris, 26-28 June 2012

II. EUROPEAN RECOMMENDATIONS

Macro-aggregates

Publish and analyse annual data on adjusted GDI / actual consumption of households, per capita / CU, in Purchasing Power Standards (PPS)

Publish jointly, within the ESS, quarterly data on adjusted GDI of households per capita, in real terms, possibly seasonally adjusted

E-frame conference, Paris, 26-28 June 2012

II. EUROPEAN RECOMMENDATIONS

Income distribution

Use the adjusted GDI of households as the reference concept to link National Accounts (NA) data with social statistics

Agree at international level on a methodology to link NA data with social statistics in order to breakdown adjusted GDI by category of households

Estimate, in a second step, the growth rate of adjusted GDI / actual consumption by category of households

Collect, if deemed necessary, additional micro-data to better impute social transfers in kind at the micro level

E-frame conference, Paris, 26-28 June 2012

III. IMPLEMENTATION

Macro aggregates – quarterly data:

October 2012: Eurostat re-focuses its quarterly household news release on adjusted GDI per capita in real terms (seasonally adjusted)

2012/2014: The ESS implements a standard template for the dissemination of quarterly household data

Cumulated growth of GDP versus Gross Disposable Income of households (total / per capita)Euro area, in volume / real terms, seasonally adjusted data, 2005Q1= 100

100

101

102

103

104

105

106

107

108

109

110

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

2005 2006 2007 2008 2009 2010

GDP Gross Disposable Income Gross Disposable Income per capita

E-frame conference, Paris, 26-28 June 2012

III. IMPLEMENTATION

Macro aggregates – annual data:

February 2012: Annual data on Adjusted GDI per capita in PPS released by Eurostat (t_nasa\tec00113 in Eurobase)

June 2012: Publication of a Statistics in Focus on the impact of the crisis on the material wellbeing of households (adjusted GDI and actual consumption)

Contribution of components to the 2007-2010 growth of adjusted GDI of households(Euro area, percentages)

-30%

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

BG PL NO SK CY SE FI BE

DK PT CZ SI FR RO NL

UK DE

EU 2

7 ES

EA17 A

T IE IT EE HU EL LT LV

Current taxes paid (-) Net wages

Gross operating surplus + gross mixed income (incl. other transfers) Net property income

Social transfers in kind received Social benefits

Gross adjusted disposable income

E-frame conference, Paris, 26-28 June 2012

III. IMPLEMENTATION

Income distribution:

Eurostat/OECD Expert Group (EGDNA) set-up to study the

methodological aspects of income distribution in OECD countries

A minima exercise carried out by Eurostat on the basis of harmonized data available at European level

End 2012/Early 2013: first results of EGDNA / Eurostat estimates for the breakdown of household income and consumption per household/CU by category of households

2013: improved imputation of social transfers in kind (Eurostat)

E-frame conference, Paris, 26-28 June 2012 11

Gross Disposable Income: EU-SILC coverage of NA totals(First results of the a minima exercise)

11

0

20

40

60

80

100BE

CZ

DK

DE

EE

IE

EL

ES

FR

IT

CY

LV

LT

LU

HU

NL

AT

PL

PT

SI

SK

FI

SE

UK

NO

CHB.6g

EU27

100%

EU-SILC in % of

NAPT 64.2EL 67.4SK 68.6LV 72.7CZ 73.9HU 74.2LT 74.3ES 75.8DE 77.0PL 77.9UK 78.2SI 80.0AT 80.4EU27 80.6IT 82.4BE 83.9FR 87.4NL 87.4EE 90.3IE 90.8FI 93.8CY 95.2LU 96.2CH 97.7DK 98.0SE 100.0NO 104.4

E-frame conference, Paris, 26-28 June 2012

III. IMPLEMENTATION

Next steps of the a minima exercise: July 2012: Breakdown of income data for a test country

– Imputations/adjustments on EU-SILC and NA data (e.g. property income / social transfers in kind)

– Sensitivity analysis

– Discussion of the results within the EGDNA framework

Autumn 2012: Extension of the breakdown to the remaining countries of EU27 and EFTA

December 2012: Publication of first results on income distribution within EU and EFTA countries

E-frame conference, Paris, 26-28 June 2012

Questions / Comments ?