Thursday, June 20, 2013

20/6/2013: Some facts about income inequality in Ireland and across OECD

Here's an interesting chart from the OECD's latest analysis of income inequality changes during the crisis:

Chart: Market income inequality rose considerably (Percentage point changes in the Gini coefficient of household market and disposable incomes between 2007 and 2010)

While Ireland ranks 1st in terms of overall gross income inequality increases during the crisis (primarily driven by the changes in the employment composition by tenure during the recession and the asymmetric recovery/price dynamics in assets markets between property and equities), we rank 9th in terms of after-tax disposable income inequality. Put differently, tax hikes did impact disproportionately those better off, so much so, they offset asymmetric income changes (including for income from assets).

This effect is partially reflected in the chart below:

Chart: Taxes and social transfers mitigated falls in market income in most OECD countries (Annual percentage changes in household disposable income between 2007 and 2010, by income component)

As things stood in 2010 (major caveats apply here), Ireland's levels of income inequality are actually below the OECD average:

Chart: There are large differences in levels of income inequality across OECD countries (Gini coefficient of household disposable income and gap between richest and poorest 10%, 2010)

Although our income inequality is above that for all EU countries, save Italy, Estonia, Greece, Spain, UK, and Portugal. In comparative across the English-speaking OECD states, we are ranked in the 1st place in terms of having the lowest levels of income inequality.

Loads of fascinating analysis on the topic here:

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