1887

OECD Economics Department Working Papers

Working papers from the Economics Department of the OECD that cover the full range of the Department’s work including the economic situation, policy analysis and projections; fiscal policy, public expenditure and taxation; and structural issues including ageing, growth and productivity, migration, environment, human capital, housing, trade and investment, labour markets, regulatory reform, competition, health, and other issues.

The views expressed in these papers are those of the author(s) and do not necessarily reflect those of the OECD or of the governments of its member countries.

English, French

Structural inequality

The case of Sweden

Structural trends not directly related to labour market functioning and redistribution have made a sizeable contribution to inequality and poverty in Sweden, but occupy only limited space in the income inequality debate. To fill this gap, we put a quarter of a century of rising inequality in Sweden in a new perspective by quantifying the effect of changing household composition, age structure, industry structure, educational attainment and immigration on inequality. The influence of structural changes on inequality is derived from micro-data from Statistics Sweden. We re-weigh subgroups of the population with certain characteristics by their population shares in 1987 to construct counterfactual income distributions for 2013 and derive inequality measures that we compare to their actual 2013 values. We find that almost half of the inequality increase between 1987 and 2013 can be mechanically ascribed to these factors.

English

Keywords: Income distribution, structural trends, demographics, immigration, poverty
JEL: I24: Health, Education, and Welfare / Education and Research Institutions / Education and Inequality; L16: Industrial Organization / Market Structure, Firm Strategy, and Market Performance / Industrial Organization and Macroeconomics: Industrial Structure and Structural Change; Industrial Price Indices; J11: Labor and Demographic Economics / Demographic Economics / Demographic Trends, Macroeconomic Effects, and Forecasts; J15: Labor and Demographic Economics / Demographic Economics / Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination; J14: Labor and Demographic Economics / Demographic Economics / Economics of the Elderly; Economics of the Handicapped; Non-labor Market Discrimination; I32: Health, Education, and Welfare / Welfare, Well-Being, and Poverty / Measurement and Analysis of Poverty; J12: Labor and Demographic Economics / Demographic Economics / Marriage; Marital Dissolution; Family Structure; Domestic Abuse; D31: Microeconomics / Distribution / Personal Income, Wealth, and Their Distributions
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