Measuring the joint distribution of household income, consumption and wealth at the micro level

This paper provides an overview of the work of the Expert Group on the Joint Distribution of Income, Consumption and Wealth at Micro Level (EG ICW) set up by Eurostat and the OECD. It discusses the challenges of producing joint income, consumption and wealth estimates, assesses their quality, and presents selected experimental results. Although the analysis reveals large differences between countries, a number of general patterns emerge. First, income, consumption and wealth are partially correlated, with the association being stronger in the tails of the joint distribution than around its middle. Second, risk of poverty goes beyond income, with asset and consumption risk of poverty being widespread, especially among some population groups. Third, a large share of households spend more than they earn. This is corroborated by negative median saving rates for households in the bottom income quintile. Fourth, inequalities are significantly higher when using a comprehensive measure of material living standards than a distributional analysis of disposable income would suggest. Looking ahead, this paper calls for further efforts to improve the robustness of the results.