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Decompositions Of Inequality By Income Source: What The Survey Data Corrected Using Tax Data Tell Us

Author

Listed:
  • Slavko Bezeredi

    (Institute of Public Finance, Zagreb, Croatia)

  • Nora Mustac

    (Institute of Public Finance, Zagreb, Croatia)

  • Ivica Urban

    (Institute of Public Finance, Zagreb, Croatia)

Abstract

Income inequality is decomposed into parts showing the contributions of individual income sources to total income inequality. The main income sources are employment income, self-employment income, capital and property income, social benefits and direct taxes. The results for Croatia are compared with the results for 14 selected EU countries, while the microsimulation model of taxes and social benefits EUROMOD was used as a source of data. The novelty brought by this research is the use of EU-SILC data for Croatia, which were corrected to reflect the top of the income distribution more representatively. The analysis shows that non-representative data offer a biased picture of total income inequality and the relative importance of individual income sources.

Suggested Citation

  • Slavko Bezeredi & Nora Mustac & Ivica Urban, 2023. "Decompositions Of Inequality By Income Source: What The Survey Data Corrected Using Tax Data Tell Us," Economic Thought and Practice, Department of Economics and Business, University of Dubrovnik, vol. 32(2), pages 549-583, december.
    • Handle: RePEc:avo:emipdu:v:32:y:2023:i:2:p:549-583
    DOI: 10.17818/EMIP/2023/2.13
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    More about this item

    Keywords

    income inequality; income sources; decomposition; EU-SILC; Gini indeks;
    All these keywords.

    JEL classification:

    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies

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