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Consumption and income inequality in Sweden: a different story

Author

Listed:
  • Daunfeldt, Sven-Olov

    (The Ratio Institute (RATIO))

  • Fölster, Stefan

    (The Royal Institute of Technology and the Confederation of Swedish Enterprise)

  • Hortlund, Per

    (The Swedish Retail Institute (HUI))

Abstract

This paper analyzes consumption- and income inequality trends in Sweden during the period 1988-2005. Similar studies for the US have found that consumption inequality has increased much less than income inequality in recent decades. Results in this paper indicate that consumption inequality actually decreased in Sweden in spite of considerable overall increase in income inequality. The apparent contradiction can mainly be explained by increased saving and life cycle redistribution among high-income households.

Suggested Citation

  • Daunfeldt, Sven-Olov & Fölster, Stefan & Hortlund, Per, 2010. "Consumption and income inequality in Sweden: a different story," HUI Working Papers 39, HUI Research.
    • Handle: RePEc:hhs:huiwps:0039
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    References listed on IDEAS

    as
    1. Bruce D. Meyer & James X. Sullivan, 2003. "Measuring the Well-Being of the Poor Using Income and Consumption," NBER Working Papers 9760, National Bureau of Economic Research, Inc.
    2. Ian Dew-Becker & Robert J. Gordon, 2005. "Where Did Productivity Growth Go? Inflation Dynamics and the Distribution of Income," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 36(2), pages 67-150.
    3. Peter Gottschalk & Timothy M. Smeeding, 1997. "Cross-National Comparisons of Earnings and Income Inequality," Journal of Economic Literature, American Economic Association, vol. 35(2), pages 633-687, June.
    4. Gary Burtless, 1995. "International Trade and the Rise in Earnings Inequality," Journal of Economic Literature, American Economic Association, vol. 33(2), pages 800-816, June.
    5. Deaton, Angus & Paxson, Christina, 1994. "Intertemporal Choice and Inequality," Journal of Political Economy, University of Chicago Press, vol. 102(3), pages 437-467, June.
    6. Orazio Attanasio & Erich Battistin & Hidehiko Ichimura, 2004. "What Really Happened to Consumption Inequality in the US?," NBER Working Papers 10338, National Bureau of Economic Research, Inc.
    7. Kotlikoff, Laurence J & Summers, Lawrence H, 1981. "The Role of Intergenerational Transfers in Aggregate Capital Accumulation," Journal of Political Economy, University of Chicago Press, vol. 89(4), pages 706-732, August.
    8. Dirk Krueger & Fabrizio Perri, 2006. "Does Income Inequality Lead to Consumption Inequality? Evidence and Theory -super-1," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 73(1), pages 163-193.
    9. Levy, Frank & Murnane, Richard J, 1992. "U.S. Earnings Levels and Earnings Inequality: A Review of Recent Trends and Proposed Explanations," Journal of Economic Literature, American Economic Association, vol. 30(3), pages 1333-1381, September.
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    Cited by:

    1. Zdeňka Malá & Gabriela Červená, 2012. "Relation And Development Of Expenditure Inequality And Income Inequality Of Czech Households," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 57(192), pages 55-78, January –.

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    More about this item

    Keywords

    Income distribution; earnings; consumption; equality;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement

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