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Volatile Top Income Shares in Switzerland? Reassessing the Evolution between 1981 and 2010

Author

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  • Reto Foellmi

    (SIAW-HSG, University of St. Gallen)

  • Isabel Z. Martínez

    (SIAW-HSG, University of St. Gallen)

Abstract

In the past twenty years, the share of top incomes in Switzerland has risen, while exhibiting large variations. Switzerland is similar to European countries for the top 1% but closer to the United States for higher top income groups. With the synthetic control method, we close a time gap in the tax data, exploiting the fact that Swiss cantons changed their tax system at different points in time. Using social security data, which cover all top labor incomes, we document the growing importance of labor compared to capital incomes among top income earners in Switzerland.

Suggested Citation

  • Reto Foellmi & Isabel Z. Martínez, 2017. "Volatile Top Income Shares in Switzerland? Reassessing the Evolution between 1981 and 2010," The Review of Economics and Statistics, MIT Press, vol. 99(5), pages 793-809, December.
    • Handle: RePEc:tpr:restat:v:99:y:2017:i:5:p:793-809
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    Cited by:

    1. Marius Brülhart & Didier Dupertuis & Elodie Moreau, 2018. "Inheritance flows in Switzerland, 1911–2011," Swiss Journal of Economics and Statistics, Springer;Swiss Society of Economics and Statistics, vol. 154(1), pages 1-13, December.
    2. Aljosha Henkel & Ernst Fehr & Julien Senn & Thomas Epper, 2024. "Beliefs about Inequality and the Nature of Support for Redistribution," Working Papers 2024-iRisk-02, IESEG School of Management.
    3. Häner-Müller, Melanie & Salvi, Michele & Schaltegger, Christoph A., 2024. "Marry into new or old money? The distributional impact of marital decisions from an intergenerational perspective," Journal of Economic Behavior & Organization, Elsevier, vol. 224(C), pages 672-687.
    4. Tobias Schoch & André Müller, 2020. "Treatment of sample under-representation and skewed heavy-tailed distributions in survey-based microsimulation: An analysis of redistribution effects in compulsory health care insurance in Switzerland," AStA Wirtschafts- und Sozialstatistisches Archiv, Springer;Deutsche Statistische Gesellschaft - German Statistical Society, vol. 14(3), pages 267-304, December.
    5. Bütler, Monika & Stadelmann, Sabrina, 2020. "Building on a pension: Second pillar wealth as a way to finance real estate?," The Journal of the Economics of Ageing, Elsevier, vol. 17(C).
    6. Matthias Krapf, 2023. "Does Income Risk Affect the Wealth Distribution?," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 49(4), pages 475-515, October.
    7. Burgherr, David, 2022. "Behavioral Responses to a Pension Savings Mandate : Quasi-experimental Evidence from Swiss Tax Data," CAGE Online Working Paper Series 645, Competitive Advantage in the Global Economy (CAGE).
    8. Martinez, Isabel Z., 2016. "Beggar-Thy-Neighbour Tax Cuts: Mobility after a Local Income and Wealth Tax Reform in Switzerland," VfS Annual Conference 2016 (Augsburg): Demographic Change 145643, Verein für Socialpolitik / German Economic Association.
    9. Paul J. J. Welfens, 2020. "Trump’s Trade Policy, BREXIT, Corona Dynamics, EU Crisis and Declining Multilateralism," International Economics and Economic Policy, Springer, vol. 17(3), pages 563-634, July.
    10. Feld, Lars P. & Frey, Christian & Schaltegger, Christoph A. & Schmid, Lukas A., 2021. "Fiscal federalism and income inequality: An empirical analysis for Switzerland," Journal of Economic Behavior & Organization, Elsevier, vol. 185(C), pages 463-494.
    11. Florian Scheuer & Joel Slemrod, 2021. "Taxing Our Wealth," Journal of Economic Perspectives, American Economic Association, vol. 35(1), pages 207-230, Winter.
    12. Paul J.J. Welfens, 2019. "Council of Economic Advisers: Biased Per Capita Consumption Comparison of the US with Europe," EIIW Discussion paper disbei257, Universitätsbibliothek Wuppertal, University Library.
    13. Enea Baselgia & Isabel Martínez, 2020. "A Safe Harbor: Wealth-Income Ratios in Switzerland over the 20th Century and the Role of Housing Prices," World Inequality Lab Working Papers halshs-03130618, HAL.
    14. Frank T Denton & Byron G Spencer & Terry A Yip, 2019. "Age-Income Dynamics Over The Life Course: Cohort Transition Patterns In Relative Income Based On Canadian Tax Returns," Department of Economics Working Papers 2019-02, McMaster University.
    15. Matthias Krapf, 2018. "The Joint Distribution of Wealth and Income Risk: Evidence from Bern," CESifo Working Paper Series 7130, CESifo.
    16. François, Martin & Mertens de Wilmars, Sybille & Maréchal, Kevin, 2023. "Unlocking the potential of income and wealth caps in post-growth transformation: A framework for improving policy design," Ecological Economics, Elsevier, vol. 208(C).
    17. Ursina Kuhn, 2020. "Augmented wealth in Switzerland: the influence of pension wealth on wealth inequality," Swiss Journal of Economics and Statistics, Springer;Swiss Society of Economics and Statistics, vol. 156(1), pages 1-16, December.

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    More about this item

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access
    • N33 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - Europe: Pre-1913

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