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This paper summarises trends and driving factors in income distribution and poverty in 21 OECD Member countries analysing separately the working- and the retirement-age populations. Shifts in relative incomes in the past ten years generally favoured prime-age and elderly age groups. Persons living in multi-adult households have seen their income shares rise somewhat, especially in households without children, or when there are two or more earners present. On the other hand, younger age groups generally lost ground, and relative income levels of single parents and persons in households with no earners tended to weaken further in many countries. There has been no generalised long-term trend in the distribution of disposable household incomes since the mid-1970s. However, during the more recent period (mid-1980s to mid-1990s), income inequality has increased in about half of the OECD countries studied, while none of the remaining countries recorded an unambiguous decrease in ...

Social Issues/Migration/Health

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During the past two decades, issues such as insufficient resources among particular populations, relative and absolute low incomes and poverty have occupied a prominent place in social policy research in many OECD countries. However, many different concepts have been used in the literature to define and measure ’low income’ or ’poverty’ across and within Member countries. This paper analyses alternative approaches to quantifying these concepts for the explicit purpose of international comparisons. It uses micro data sets on income from the Luxembourg Income Study for 13 OECD countries, for the mid- to the end of the 1980s, to illustrate the issues. In Chapter II, the three main approaches used in the literature for defining low income and poverty - the absolute, relative and subjective approach - are discussed in detail. Chapter III discusses ways to adjust disposable income for family size and presents sensitivity tests using different equivalence scales. Chapter IV presents more ...

Social Issues/Migration/Health

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Public support to families with pre-school children can be in the form of cash benefits (e.g. child allowances) or of “in-kind” support (e.g. care services such as kindergartens). The mix of these support measures varies greatly across OECD countries, from a cash / in-kind composition of 10%/90% to 80%/20%. This paper imputes the value of services into an “extended” household income and compares the resulting distributive patterns and the redistributive effect of these two strands of family policies. On average, cash and in-kind transfers each constitute 7 – 8% of the incomes of families with young children. Both instruments are redistributive. Cash transfers reduce child poverty by one third, with the estimated impacts in Austria, Ireland, Sweden, Hungary and Finland performing above average. When services are accounted for, child poverty falls by one quarter and poverty among children enrolled in childcare is more than halved. This reduction is highest in Belgium, France, Hungary, Iceland and Sweden.

Social Issues/Migration/Health

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This paper looks at how the income distribution in countries changes when the value of publicly-provided services to households is included. We consider five major categories of public services: education, health care, social housing, childcare and elderly care. On average across OECD countries, spending on these “in-kind” benefits accounts for about 13% of GDP, slightly more than the spending on cash transfers – but with considerable cross-country variation. Broadening the income concept to account for in-kind benefits considerably increases households’ economic resources: in a typical OECD country, the average annual household income would be close to USD 28 000, rather than USD 22 000 in purchasing power parities. But public services also contribute to reducing income inequality, by between one-fifth and one-third depending on the inequality measure. Mexico and, according to most inequality measures, the United States, Portugal, Ireland, and the United Kingdom record higher reduction rates, while Slovenia records lower ones. Across all countries, redistributive effects are stronger among specific population groups at higher risk of poverty. Between 2000 and 2007, the redistributive impact of public services remained stable overall. However, the impact became stronger in countries where the share of services in household income increased significantly, while it weakened in those countries where this share decreased. The paper suggests that publicly provided services fulfil an important direct redistributive role in OECD countries.

Employment --- Social Issues/Migration/Health

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The shares of top income recipients in total pre-tax income have increased in OECD countries in the past three decades, particularly in most of the English-speaking countries but also in some Nordic (from low levels) and Southern European countries. Today, the richest one percent receives between 7% of all pre-tax income in Denmark and the Netherlands up to almost 20% in the United States. This increase is the result of the top 1% capturing a disproportionate share of overall income growth over the past thirty years: around 20 – 25% in Australia and the United Kingdom, up to 37% in Canada and even 47% in the United States. At the same time, tax reforms in almost all OECD countries reduced top personal income tax rates as well as rates of other taxes affecting the highest income earners. Indeed, while top tax rates were equal to or above 70% in half of the countries in the mid-1970s, this rate has been halved in many countries by 2013.

Social Issues/Migration/Health --- Taxation --- Economics