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Income Inequality Measurement in Greece and Alternative Data Sources: 1957-2009 K. Chrissis, A.

Livada Athens University of Economics and Business Technical Report No 262

ATHENS UNIVERSITY OF ECONOMICS AND BUSINESS DEPARTMENT OF STATISTICS OCTOBER

2012

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Abstract
The main objective of this discussion paper is the estimation of income inequality in Greece for the period 1957-2009. Alternative income sources are used for the estimation of aggregate and disaggregate measures. Empirical evidence from tabulated tax data indicates an increase on aggregate income inequality. This view is not supported by estimates derived from other data sources (i.e. Household Expenditure Survey). The level of aggregate inequality, also, differs from other empirical results. These findings imply that different data sources and/or methodological approaches could lead to different conclusions for the direction and/or level of aggregate income inequality. Nevertheless, top income shares yield similar trend (for certain periods) and level (to the possible extend) regardless the data sources. This view is consistent with Leigh (2007) that top income shares may be a useful substitute for other measures of inequality.

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Estimation of aggregate measures of income inequality from grouped tax data Tax data provide detailed information on nominal family income and its sources. 5 . now ELSTAT) since 1958. Micro data are utilized in section 3. In section 4 empirical results from other studies utilizing other sources [European Community Household Panel (ECHP) and Household Expenditure Survey (HES) micro data] are discussed. Family income is the sum of income received by the husband and/or wife. More specifically. This definition also includes single persons. Introduction This paper provides empirical evidence for income inequality in Greece. The time period of the analysis is from the year 1957 to the year 2009. The summary of the empirical findings are presented in the section 6.1.Income Inequality Measurement in Greece and Alternative Data Sources: 1957-2009 1. Aggregate measures of income inequality from grouped tax data 2. imputed income was introduced in 1997 and its impact is in low levels: around 3% for the years 1997-2002 and around 0. Moreover. Total family income is the sum of one or more of the following components1 a) Income from employment b) Income from buildings and lease of land c) Income from securities d) Income from commercial and industrial enterprises e) Income from agricultural enterprises f) Income from self-employment g) Income from abroad 1 The category (b) is a merging of two categories after 1984 (economic year 1985): Income from buildings and Income from lease of land excluding buildings. data are from EU SILC for the period 2002-2009. These data are compiled by the Tax Authorities and have been published annually by the National Statistical Service of Greece (NSGG.5% for the rest years. In all cases corresponding evidence from other countries are presented. in section 2 empirical time-series evidence on economic inequality from grouped tax data will be presented. Alternative data sources and methodologies are applied and inequality measures are provided. 2. From 2003 onwards the publication is conducted by General Secretariat of Informatics Systems of Ministry of Finance. as reported annually in tax declaration forms. Also category (d) is divided in two subcategories for the years 1976-1998 according to the type of the enterprise. Section 5 displays the comparison for all results of aggregate income inequality.

 Gini Coefficient (G)  Relative Mean Deviation (M)  Atkinson Index ( ) (ε=0. Furthermore. 1982). The compiled index of Relative Mean Deviation refers only to lower bound. During the whole period the number of classes has changed. these aggregate indices are widely used for the empirical measurement of inequality. The mean value of the computation of these two techniques provides the final estimation of the measure. The following charts are the graphical illustration of the time series of each individual index. Two interpolation methods were used: the split-histogram interpolation method and the linear interpolation method. Tax data are reported in tabulated form (grouped tax data). The estimates for the aggregate inequality measures are presented in Table 1.The tax declarations are submitted in the following year of the year of reference. The following indices have been estimated for the declared income of the physical persons (grouped tax data). The distribution of the data within each class is not known. the summary inequality measures are compiled. The lower and upper bounds of the estimation have been also compiled. Thus. Taking into consideration the issues addressed for the data consistency in the previous section.CV) (a=2) The choice of these indices is based on the underlying properties. 2 The monotonic transformation is GE(2)=(CV^2)/2 6 . being more analytical in the latter years. This issue is being tackled using interpolation methods (Cowell and Mehta.5)  General Entropy (GE(0) Theil‟s L or Mean Log Deviation) (a=0)  General Entropy (GE(1) Theil‟s T) (a=1)  General Entropy (GE(2) type of Coefficient of Variation2. „economic year 2010‟ refers to the calendar year 2009.5)  Atkinson Index ( ) (ε=1. The term „economic year t‟ refers to income that was acquired in the previous year.

232391 0.722323 0.382023 0.739465 0.413822 0.332894 0.577988 0.389799 0.398971 0.145295 0.595419 0.434447 0.404392 0.298338 0.285277 0.291591 0.416844 0.398079 0.377859 0.417930 0.681033 0.291825 0.308334 0.464903 0.736807 0.288476 0.445673 0.910893 0.301635 0.149913 0.589858 0.415320 0.333068 0.401974 0.214098 0.394175 0.413949 0.400694 0.356077 0.410515 0.230772 ATKINSON 1.764077 0.488780 0.532044 0.552220 0.586885 0.313500 0.848538 0.535146 0.423490 0.342084 0.827603 0.339821 0.711761 0.392954 0.303249 0.749922 0.256601 0.220672 0.489687 0.139982 0.474531 0.676942 0.411731 0.408982 0.643488 0.170262 0.384327 0.198505 0.388022 0.578759 0.212691 0.482901 0.596719 1.305601 0.532496 0.717045 0.630771 0.282220 0.586860 0.299029 0.320998 0.437325 0.389228 0.328888 0.343765 0.449830 GENERAL ENTROPY 2 1.417591 0.431325 0.307514 0.216697 0.691951 0.404288 0.220999 0.696578 0.291436 0.915198 0.498817 0.150449 0.706447 0.476077 0.365569 0.439141 0.289680 0.714270 0.498291 RELATIVE MEAN DEVIATION 0.387459 0.337326 0.536807 0.576680 0.663274 0.633222 0.519844 0.124811 0.562811 0.571844 0.414897 0.491397 0.665556 0.142381 0.420293 0.425086 0.408902 0.5 1957 1958 1959 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 0.794060 0.706877 0.820693 0.615064 0.483992 0.594532 0.393548 0.436485 0.143293 0.693105 0.770318 0.576938 0.449396 0.404044 0.617441 0.5 0.700273 0.512957 0.575034 0.120729 0.152509 0.300364 0.287544 0.147218 0.312264 0.452053 0.693310 0.863092 0.408899 0.388730 0.454708 0.373141 0.291718 0.485528 0.336113 0.171794 0.898989 GENERAL ENTROPY 0 0.848531 0.154745 0.314016 0.287735 0.262817 0.438636 0.701494 0.224316 0.293722 0.137087 0.417436 0.530121 0.410685 0.442247 0.617577 0.631831 0.320336 0.717089 Source: Authors„ calculations 7 .129247 0.463643 0.408418 0.553312 0.379882 0.598081 0.431890 0.325014 0.301029 0.139420 0.133402 0.221719 0.325717 0.467887 0.303968 0.620345 0.426127 0.150104 0.407225 0.577778 0.590676 0.559172 0.444225 0.378535 0.296211 0.125803 0.707039 0.125339 0.863524 0.294920 0.146861 0.313287 0.667374 0.281261 0.137011 0.641472 0.130009 0.284365 0.669007 GINI 0.580491 0.668302 0.407658 0.559498 0.143147 0.156314 0.241968 0.704507 0.629912 0.391092 0.617437 0.146047 0.381534 0.453717 0.695863 0.676182 0.142744 0.338545 0.495808 0.415713 0.591613 0.439562 0.677322 0.625213 0.549920 0.580770 0.701187 0.691441 0.408140 0.811646 0.219531 0.480464 0.437052 0.144667 0.716971 0.294052 0.490765 0.403768 0.704996 0.384666 0.584255 0.286246 0.573240 0.703828 0.298940 0.282211 0.216589 0.142898 0.298773 0.500150 0.264442 0.772651 0.633260 0.331153 0.367969 0.284268 0.714484 0.218191 0.554751 0.145880 0.409391 0.663650 0.160726 0.680229 0.376434 0.327026 0.411215 0.324962 0.169085 0.310289 0.558320 0.134153 0.150620 0.198601 0.307042 0.773032 0.765948 0.575053 0.428522 0.536603 0.535721 0.555770 0.700373 0.555033 0.879645 0.299139 0.483031 0.853551 0.385709 0.680800 0.582500 0.414321 0.706715 0.368121 0.787963 0.408173 0. INCOME INEQUALITY MEASURES ATKINSON 0.300990 0.380320 0.273980 0.584588 0.564951 0.281239 0.221513 0.599381 0.139517 0.406300 0.488239 0.619126 0.572324 0.417382 0.399863 0.221107 0.456935 0.136996 0.770963 0.403161 0.701416 0.304480 0.483906 0.151827 0.242405 0.367453 0.625355 0.322473 0.493436 0.233857 0.433088 0.690938 0.387022 0.768572 GENERAL ENTROPY 1 0.414226 0.871003 0.183395 0.705327 0.394428 0.682915 0.561607 0.246837 0.316698 0.379982 0.550536 0.430103 0.801579 0.254428 0.404701 0.329657 0.531819 0.863773 0.271550 0.Table 1.776530 0.635514 0.386605 0.432737 0.871791 0.579896 0.

591613 in 1957 and reaching the level of 0. an increasing trend of inequality during the reference period. The Theil‟s Index (GE(1)) suggests. 1973 and 19743.10 0.20 0. The Relative Mean Deviation suggests an increase as well.282220 and 0. The upward trend seems to take place from the early 1990s. The monotonic transformation of Coefficient of Variation (GE(2)) suggests a decline of inequality during the period.898989 respectively for the year 2009. an increase in income inequality. also.25 0.392954 in 1957 and reach the level of 0.449830 in 2009. It arises from 0. The Mean Log Deviation (GE(0)) implies an increase of income inequality. According to the empirical findings.768572 for the years 1957 and 2009.230772 and 0. The upward trend.Looking the period as a whole the empirical results are summarized as follows. The Gini coefficient implies an increase of inequality.05 0. Dimelis and Livada (1994) (1997)]. 1957 1958 1959 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 8 . The two variations of Atkinson index yield the same results. It. being relatively steady in the previous period. It starts at 0. six indices indicate an increase of income inequality while one (GE (2)) indicates the opposite (decrease). as in the case of Gini. also presents cases of outliers. starting with a value of 0. emerges from the early 1990s. indicating that is.150620 and 0.00 Source: Authors„ calculations 3 Adjustments have made for six years.313287 respectively for the year 1957 and 0. Atkinson and are 0. The mathematical results are similar to previous studies [Livada (1988) (1991). with values of 0. but the conclusions differ due to the quite different reference period. although the trend is not steady.498291 in 2009. especially for years 1957. Figure 1-ATKINSON 0.5 0. Livada and Tsakloglou (1993).15 0.413949 in 1957 to 0.717089 in 2009.

25 0.00 1.20 0.50 0.THEIL T Figure 5-GENERAL ENTROPY 2-CV 1957 1958 1959 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 1957 1958 1959 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 1957 1958 1959 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 1957 1958 1959 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 9 .40 0.80 0.80 1.45 0.30 0.30 0.40 0.05 0.30 0.20 0.00 0.70 0.40 0.0.35 0.00 0.20 0.00 0.50 0.10 0.N (MLD) Figure 4-GENERAL ENTROPY 1 .10 0.40 0.00 Source: Authors„ calculations Source: Authors„ calculations Source: Authors„ calculations Source: Authors„ calculations Figure 2-ATKINSON 1.80 0.15 0.50 0.20 1.70 0.20 0.40 0.90 1.60 0.00 0.60 0.60 0.90 0.10 0.5 Figure 3-GENERAL ENTROPY 0 .

40 0.70 0.20 0.80 0.20 0.30 0.0.40 0.30 0.00 0.50 0.60 Source: Author„ calculations Source: Authors„ calculations Figure 6-GINI.60 0.50 0.10 0.10 0.00 0.G Figure 7-RELATIVE MEAN DEVIATION-M 1957 1958 1959 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 1957 1958 1959 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 10 .

013994 (13.011743 (10.13672) 0.980095) 0.2. The sign of the coefficient.432855) 0.91 0.95194) 0.20 White 0. Time series analysis The following table illustrates the results for Least Square linear regression corrected with AR(1)4 for the time series of the estimated inequality measures.115026 (2. that is with cross terms 11 .984390) 0.004553 (3. Table 2.63 + 0.510394 0. its p-value and the r-square are also included Table 4.982442) 0.20 + 0.85611) 0.203592 (3.70 0.* Not statistically significant MEASURES GE_2 (CV) CONSTANT 0.00 1.04 0.00 0.11 0.889414 (8.91 0.793125) 0.27 0.18 OLS indicated strong evidence of autocorrelation This is the original White test.952647) 0.94 + 0.18 0.839840 (14.393311) R-SQ 0.23 0.633000 (6.00 2.710967 (7.565948 Source: Authors‟ calculations Note: All values significant at 1% level The summary tests (p-values) of Jarque Bera (testing whether the series of residuals is normally distributed – H0: normal distribution).00 GINI + 0.004398 (3. Durbin-Watson and GodfreyBreusch (testing for autocorrelation and serial correlation – respectively: DW-d around 2 no autocorrelation and H0: no serial correlation) and White5 (testing for heteroscedasticity – H0: no heteroscedasticity) are presented in the following table.60 0.480551 (10.000987* (0.5 Atkinson_1. Trend for aggregate inequality measures MEASURES Atkinson_0.98 Source: Authors‟ calculations 1957-2009 Atk 0.00 0.964081 R-SQ 0.36 0.649480 0.96 0.914274 0.956647) 0.73 0.810452 (11.195963 (5.002656) (6.96 0.000488 (3.37721) 0.37 1.348991 (16. Consistency tests for time series models Sign p-value R-square Normality DW-d + 0.13 2. The GE(2) seems to be better described by the quadratic model according to Table 3.904415 0.123914) 0.92479) COEFFICIENT (0.00 0.002803 (4.00 0.535418) Table 3.04 + 0.96 0.99147) 0.94 RMD + 0.5 GE_0_mld GE_1_Theil GE_2_CV_sq 4 5 LM(-2) 0.79 0.416900 (3.91 0.955844 Source: Authors‟ calculations Note: All values significant at 1% level (except where *) .61 1.2.89312) 0.5 GE_0 (Mean Log Dev) GE_1 (Theil T) GE_2 (CV) Gini Rel Mean Deviation CONSTANT 0.028251 (-3.02 0.936205 0.399722) AR (1) 0.964305 0.728127) AR(1) 0.57 0. Quadratic model for GE_2 (CV) COEFFICIENT COEFFICIENT 2 -0.836165 (11.86 1.369575) 0.00 0.29531) 0.00 0.814197 (11. In all cases except General Entropy (2) a positive trend appears.94 0.613232 (5.00 1.088968 (5.999479) 0.15 0. the slope coefficient is statistically significant at 1%.5 Atk 1.549742 (4.298558) 0.572799) 0.00 0.

The Hodrick and Prescott methodology (HP filter) is a popular detrending technique due to the flexibility. The methodology has as follows. The actual series. Then the cyclical component is obtained by deriving the deviations of the estimated trend from the actual series. 6 The parameter using the frequency power rule of Ravn and Uhlig is the number of periods per year divided by 4. The significant issue is that with the insertion of correction term AR(1) the problem of autocorrelation is resolved. Nevertheless. 12 . The regression that seems to fit for GE(2) is presented in Table 3. Finally. Table 4 summarizes the results for the consistency of the models.5. GE(1). Moreover. the smoothed series according to HP filter (with the parameter of Ravn and Uhlig) and the cyclical component for the seven aggregate inequality indices are presented in the following graphs.3. The smoothed trend is estimated according to Hodrick and Prescott (1980) methodology. Moreover. and multiplied by 1600. taking into account the high values of the r-square. For each series the trend component is estimated using the HP filter (with the parameter of Ravn and Uhlig). the models do not face issues of heteroscedasticity (only for 1% for GE(1) and Gini). the frequency power rule of Ravn and Uhlig (2002) is applied6 (the figure of power suggested is 4 meaning that λ is 6.25). In conclusion.All models have statistically significant coefficients except GE(2). coefficients are statistically significant in 1% level with OLS – AR(1) of second order. whereas GE(2) indicate a decline followed by an increase (explaining thus the quadratic model of description). the models are satisfactory enough for a typical time series analysis. Gini and RMD) succeed in the normality of residuals test. indicate an upward trend for the period 1957-2009. simplicity and well-defined criteria on which it was designed. the value of GE(2) never reached its initial level. it seems that all summary inequality measures. Business cycles characteristics In this section the business cycle characteristics of the estimated aggregate income inequality measures are calculated as supplementary evidence to the typical time series analysis conducted in the previous section. 2. raised to a power. Most of the estimations (Atkinson_0. In all cases the trend yield a positive sign. except GE(2).

04 60 65 70 75 RMD 80 85 90 95 00 Cycle 05 .02 .01 -.10 60 .36 65 70 75 GINI 80 85 90 95 00 Cycle 05 GE_2_CV Cycle Trend Figure 14.6 .25) 1.25) .00 -.4 0.0 -.08 GE_0_MLD Cycle GE_1_THEIL Cycle Figure 12.008 . Hodrick-Prescott Filter (lambda=6.6 .2 60 65 70 75 80 85 90 Trend 95 00 05 .012 60 65 70 75 ATK_05 80 85 90 95 00 Cycle 05 -.60 .16 .02 -.08 .2 65 70 75 ATK_15 80 85 90 95 00 Cycle 05 Trend Trend Figure 10.05 -.15 Figure 9.65 .02 60 0.08 .00 -.12 .35 .40 .50 .04 .0 .6 0. Hodrick-Prescott Filter (lambda=6.008 -.8 0.01 Figure 13.004 -.4 .30 .2 .012 .2 1. Hodrick-Prescott Filter (lambda=6.2 0. Hodrick-Prescott Filter (lambda=6.04 60 65 70 75 80 85 90 Trend 95 00 05 60 65 70 75 80 85 90 Trend 95 00 05 .000 -.48 .02 .8 0.25 .4 .55 Trend 13 .00 -.75 .12 .4 .04 -.0 0.02 0.24 .2 .00 -.05 .02 -.00 0.04 0. Hodrick-Prescott Filter (lambda=6.45 .8 Figure 11.Figure 8. Hodrick-Prescott Filter (lambda=6.04 0.25) . Hodrick-Prescott Filter (lambda=6.10 .50 .20 .25) .0 0.25) 1.70 .40 .6 .25) .004 .44 .25) 1.52 .

Babones and Alvarez-Rivadulla (2007) made an effort to unify the data of WIID compiling the Standardized Income Distribution Database (SIDD). They combined many earlier datasets and evaluated the quality of their observations. Germany. This survey replaced the European Community Household Panel (ECHP).4 International experience There is an enormous amount of empirical research on income inequality. social exclusion and living conditions. Sweden. created by the United Nations University (UNU-WIDER). 1990. Another known database is the dataset compiled by Deininger and Squire (1996). 8 9 The European Union has set up a survey for collecting data on income. health. They estimated adjustment factors for different scopes of coverage. LIS is covering a variety of countries (mainly European in addition to USA. the update is only published in WIID2 (current version 2c in 2008) due to agreement between the World Bank and WIDER to publish one database only. There are six waves7 (around 1980. poverty. Australia. The micro data are derived from various surveys. Wave V (ECHP data) and Wave VI (EU-SILC9 data). From methodological point of view. 1985. see Atkinson and Brandolini 2001). The issue. they refer that „differences in the definition of the underlying data might still affect intertemporal and international comparability‟. UK and USA The European Community Household Panel (ECHP) is a survey based on a standardized questionnaire covering a wide range of topics such as income. for example data for Greece are included in Wave IV (ECHP8 data). education etc. One of the most influential projects is the Luxemburg Income Study (LIS). See also Section 3. definitions of income and consumption are used. nevertheless. As a result several cross-national datasets have been compiled (for a review. The successor to the Deininger and Squire data set is the World Income Inequality Database (WIID). Also the new data of Deininger and Squire 2004 are included. 2000 and 2004) and wave 7 is under a new template (revised in 2011). See also Section 4/ECHP. income definitions and reference 7 And historical databases for Canada. The European Union Survey on Income and Living Conditions (EU SILC) includes micro data on income on household and personal level that can be used for the estimation of income distribution.) and provides micro data for demographic. 14 . data from national surveys are harmonized and standardized before the calculation of income inequality indices. labor market. The survey was launched in 1994 and ended at 2001. Data from the two previous datasets and from other sources are incorporated. the household is to be the basic statistical unit (otherwise it is considered problem and is reported) and income or consumption is to be adjusted to take account of household size using per capita incomes or consumption. is that the estimates are based on different income definitions and reference units. Mexico etc. Consequently. 1995.2. expenditure and income variables.

Solt uses a custom missing data algorithm to standardize the WIID (ver 2c-2008). The time series from SWIID indicate intense variations during the whole period.1 Greece_tax 15 .5 0. values are higher until 1993 while values are quite close in the beginning of 70s in the middle of 80s and in the beginning of the decade of 2000. It is apparent that considerable differences exist. Similarities in the trend (increase) are detected in the second half of 80s and 90s.Gini coefficient 0.45 0. It should be noted that the results are not totally comparable since the data sources and the methodology differs. it summarizes (before the standardizing algorithm) the reference units (5 categories) and income definitions (4 categories).55 0. nevertheless the amounts does not include social contributions. Figure 15 . being more intense in estimates derived from SWIID and tax data correspondingly. the substantial existing inconsistencies should be taken into consideration and the comparison is conducted for indicative reasons.3 0.International Comparison I . Compared to tax data. gross income and household per capita inequality.35 0. the choice of the variable is the gross income since the indices derived from tabulated tax data refers to „declared income‟.6 0. Therefore. Another database is the Standardized World Income Inequality Database (SWIID) compiled by Solt (2009). As it is implied SWIID utilizes all available data. For comparison reasons.25 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Greece Sources: Authors„ calculations and SWIID 3. data collected by the LIS served as standard.1 ) for as years as possible from 1960.4 0. According to the author the SWIID provides comparable Gini indices of gross and net income inequality for 173 countries (SWIID version 3. that is the tax has not been paid.units which bring all data to a common standard based on national coverage. The following figure presents the Gini coefficient derived from the SWIID and tabulated tax data for Greece. Data from SWIID are selected in order to compare the empirical findings from the usage of tabulated tax data with other countries.

Switzerland. The results of the comparison of Greece with the first group (Italy.35 0. It is noticeable that Gini coefficient is in higher level in Greece from the mid 1990s with the exception of Portugal and partly France.5 0. In the decade of 1980 inequality in Greece is higher only compared to Netherlands and partly Germany (only for the first half of the decade) and in the same level with Switzerland and partly USA and UK (both in the beginning of the decade).3 0.25 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 France Sources: Authors„ calculations and SWIID 3. The first group consists of South European countries such as Italy. UK and USA is presented in the next figure. Finally in the second half of the 16 . Until 1980.International Comparison II . Greek Gini increases more intensely in the beginning of 90s. Switzerland. The second group includes countries from Central and North Europe (Germany. Figure 16 . It is exceed only by Germany (late 90s) and Netherlands (early 00s). in France is higher only in the second half of the last decade.55 0.Gini coefficient 0. Netherlands. higher than Spain (with the exception of late 60s and mid-70s). Sweden in 1975 and Netherlands in 1973 and 1977) or periods (lower in Sweden in the late 60s).6 0. Netherlands and Sweden) as well as UK and USA.45 0. inequality in Greece is higher than in UK and in the same levels with USA (though in USA is higher prior to 1970) and lower than other countries with the exception of certain years (almost equal for Germany in 1972 and 1977. Portugal) are presented in the next figure.1 Italy Spain Portugal Greece_tax The outcome of the comparison of Greece with the second group (Germany. aggregate income inequality in Greece is usually lower than Portugal. Looking at the whole period. Spain.4 0.The comparison of Gini „s estimates (grouped tax data) for Greece is conducted with two country groups. Spain. Portugal and France (although France could be considered part of Central Europe). In the second half of 1990s aggregate income inequality in Greece is higher than every country. France (with the exception of first half of 90s and second half of the decade of 2010) while is lower than Italy until 1980 and higher from mid 90s and onwards. Sweden. France.65 0.

International Comparison III . as it was noted.Gini coefficient 0. Estimation of aggregate measures of income inequality from EU-SILC data The European Union has set up a survey for collecting data on income. while it was a „medium‟ case in the previous period. The EU SILC project was launched in 2003 for Greece.55 0.4 0.6 0.25 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Germany USA UK Ireland Sweden Switzerland Netherlands Greece_tax Sources: Authors„ calculations and SWIID 3. These variables have been utilized to estimate the distribution of income in the whole 17 . thus survey for 2010 illustrates information for the year 2009. The broader conclusion could be that after the mid 1990s aggregate income inequality in Greece is in high levels compared with other countries.35 0. Figure 17 .1.1 Since. poverty. The European Union Survey on Income and Living Conditions (EU SILC) includes micro data on income on household and personal level that can be used for the estimation of income distribution. This survey replaced the European Community Household Panel (ECHP).45 0.last decade the level are similar to UK and slightly above USA. several variables that approach the concept of income have been calculated. Aggregate measures of income inequality from EU-SILC data 3. 3. Therefore.5 0. Sweden and Switzerland. The data are produced on annual basis and the reference population is all private households and their current members residing in the territory of the Member State at the time of data collection.3 0. The year of the survey contains data for the previous year. the results are not fully comparable it is not necessary to take into account the absolute levels of the Gini „s estimates. social exclusion and living conditions. EU SILC data contain information for various components of income.

e 2009 are results from the survey of 2010. first proposed by Haagenars et al. housing allowances. It is noted that the years are the reference periods and not the years the survey has been conducted. The rationale was mainly the conceptual difficulty of incorporating „negative‟ income in the compilation.have been used for income inequality analysis. These variables describe the concept of income on household level. It. profit from capital investments in unincorporated business. net cash benefits or losses from self-employment (including royalties). of 0.according to the topic . dividends. net income from rental of a property or land. The size of the household and the age of its members are important factors. The results are summarized in the following table. therefore.population. assigns a value of 1 to the household head. income shares (deciles).5 and 1. The most appropriate . The variable used for the estimation of income distribution is the ‘Total net household income_ no negative PY050N (HY010net_nn)’. Basic descriptive statistics. 1(Theil T) and 2] and Coefficient of Variation. includes net employee cash or near cash income. ratio of income shares and aggregate income inequality measures have been estimated for the ‘Total net household income_ no negative PY050N (HY010net_nn)’. i. education-related allowances. therefore the use of an equivalence scale is appropriate. In this case we do not take into account the negative values in the variable net cash benefits or losses from self-employment (including royalties). This variable is slightly different from the corresponding one („Total disposable household income (HY020)’) used by ELSTAT. General Entropy Indices [parameters 0 (Theil L). The inequality indices are Gini coefficient. This scale. regular inter-household cash transfers received. It has been adjusted for the size of household and the age of the members of household with the OECD-modified scale. (1994). benefit from social exclusion not elsewhere classified. The time period of the analysis is from the year 2002 to the year 2009. percentiles. In this study the "OECD-modified scale" is utilized. Eighteen (18) variables were compiled. Total net household income_ no negative PY050G (HY010net_nn): This variable includes net income on household level taking into account.3 to each child. interests. Nevertheless the latter variable will be used for international comparison purposes. old-age benefits. disability benefits. 18 . family/children related allowances.5 to each additional adult member and of 0. survivor' benefits. Atkinson index (parameters 0. also. sickness benefits. income received by people aged under 16. company car.5). unemployment benefits. components of personal net income.

41 6.759 0.15 0.07 0.15 0.269 0.08 0.324 0.05 0. while the lower 10% is recipient of approximately 2.213 0.15 0.12 0.742 0.102 0.08 0.200 0.03 0.10 0.13 0.06 0.07 0.265 0.09 0.03 0.05 0.02 0.104 0.10 0. This implies that the recession. 19 .214 0.349 0.276 0.37 5. The level of 2009 is not lower compared to the corresponding one of 2008. departing from 9.268 0.12 0.204 0.09 0.25 10.04 0.788 0.21 0.12 0.07 0.354 0. which is more apparent from 2009.190 0.dev Percentiles-1% Percentiles-5% Percentiles-10% Percentiles-25% Percentiles-50% Percentiles-75% Percentiles-90% Percentiles-95% Percentiles-99% Shares Decile_01 Decile_02 Decile_03 Decile_04 Decile_05 Decile_06 Decile_07 Decile_08 Decile_09 Decile_10 S90/S10 S80/S20 GINI Atkinson 0.08 0.14 0.5% of income.15 0.199 0.08 0.09 0.26 10. The indices that indicate the gap between the income shares of certain portions of population are S80/S20 and S90/S10. since no data are available for the rest period of economic crisis this aspect is under scrutiny.45 5.200 0.04 0.04 0.04 0.193 0.288 0.27 11.08 0.322 0.02 0.22 0.56 6.06 0.09 0.86 0.09 0.16 0.12 0.26 9.102 0.09 0.348 0.05 0.211 0.207 0.27 10.04 0.350 0.10 0. nevertheless the trend is not stable for the whole period.754 According to the Table 5 for the ‘Total net household income_ no negative PY050N (HY010net_nn)’.259 0. the average income illustrates an increasing trend.04 0.103 0.03 0.732 0.07 0.26 11.15 0.343 0.12 0.769 0. which is simply the ratio between the income share of upper and lower income classes.06 0. The decrease is more obvious in the year 2009 especially for S90/S10.16 0.100 0.52 6.310 0.10 0.5 Atkinson 1.07 0.335 0.06 0.05 0.08 0.295 0.09 0.02 0.805 0.06 0.04 0.340 0.352 0.08 0.98 0.38 0. There has been a small decrease in both indices.207 0.09 0.HY010NET_NN_EQ Observations Average St.63 5.254 0.11 0.10 0.284 0.803 0.222 0.756 € in 2002 and resulting in 13. The 10% income share yields approximately 26% of the generated income.16 0.193 0.10 0.280 0.210 0.03 0.5 GE(0)=Theil L GE(1)=Theil T GE(2)=CV CV Source: Authors‟ calculations Table 5 Total net household income_ no negative PY050N (HY010net_nn) 2002 2003 2004 2005 2006 6665 6252 5568 5700 5643 9756 10211 10945 11480 12133 7500 7471 8127 8719 9744 1245 265 1000 1817 1333 2400 2732 3000 3251 3433 3344 3760 3945 4153 4336 5300 5699 6000 6188 6526 8012 8566 9000 9415 9847 12203 12902 13587 14180 14770 17300 18040 19600 20513 21684 21793 22310 24667 26012 26871 37667 37727 42830 43975 49068 2007 6503 12905 10165 1500 3889 4861 7125 10600 15822 22590 28000 49424 2008 7036 13441 10827 0 4014 5043 7619 11013 16373 23125 29174 57400 2009 7005 13503 10176 1440 4260 5357 7676 11147 16420 23400 29005 51997 0.27 10.106 0.03 0.216 0.273 0. seems to affect more the upper income classes.213 0.101 0.06 0. but the trend of the increase is considerably less intense since Greece had already entered recession.096 0.11 6.13 0.268 0. Nevertheless.05 6.06 0.26 9.12 0.08 0.503 € in 2009.267 0.10 0.05 0.12 0.57 0.

in all cases a small decrease is noted from 2008 to 2009.The behavior of the aggregate inequality indices (GINI.3 0. Figure 20 contains the indices of S90/S10 and S80/S20 and finally Figure 21 illustrates the trend of the seven aggregate inequality indices.05 0 2002 2003 2004 Decile_01 Decile_09 Sources: Authors‟ calculations 2005 2006 2007 2008 2009 Decile_02 Decile_10 20 . The following figures summarizes the main results for the ‘Total net household income_ no negative PY050N (HY010net_nn)’. Figure 18. Figure 19 shows the trend of lower 10% and 20% and upper 10% and 20% of income shares. implies a miniscule decline in inequality in the beginning of economic recession in Greece. Atkinson_0.25 0.15 0.1 0.5. Total net household income_no negative PY050N (HY010net_nn) Average Income 16000 14000 12000 10000 8000 6000 4000 2000 0 2002 2003 2004 2005 2006 2007 2008 2009 Average Sources: Authors‟ calculations Figure 19. General Entropy_0. Total net household income_no negative PY050N (HY010net_nn) Income Shares 0. due to the absence of data for the rest of the period of economic crisis no firm conclusions can be drawn. nevertheless.5. also. Figure 18 illustrates the trend of the average income.2 0. Atkinson_1. General Entropy_1. Though. In all cases the absolute values are slightly changing in both directions (increase or decrease). This element. Once again it is noted that the reference year of the survey is the previous year (t-1). General Entropy_2 and Coefficient of Variation) is rather stable with miniscule decline.

5 0.1 0 2002 2003 2004 2005 2006 2007 2008 2009 Sources: Authors‟ calculations GINI Atkinson 0. Livada and Tsakloglou (2011) estimated the top income shares from grouped tax data according to Piketty (2001) approach. since most of these components are to be declared to the tax authorities.5% and 0.3 0. 0.e. Table 6 illustrates the results for the variable ‘Total net household income_ no negative PY050N (HY010net_nn)’ for 1%.9 0. It is reminded that. The concept of the declared income.7 0.Figure 20. pensions etc).6 0.8 0.5 GE(0)=Theil L GE(1)=Theil T GE(2)=CV CV Top Income Shares Chrissis.5 Atkinson 1. This variable contains no negative values and the net components of the income are relative similar to the declared tax income. 21 . wages. net amounts are to be reported in the tax declarations (i. mainly.1% top income shares (after applying OECD equivalence scale). Total net household income_no negative PY050N (HY010net_nn) S90/S10 and S80/S20 indices 14 12 10 8 6 4 2 0 2002 2003 2004 2005 S90/S10 Sources: Authors‟ calculations 2006 2007 2008 2009 S80/S20 Figure 21. which was the underlying variable.2 0. Total net household income_no negative PY050N (HY010net_nn) Aggregate inequality indices 0. is relatively comparable with the variable of the ‘Total net household income_ no negative PY050N (HY010net_nn)’. salaries.4 0.

disability benefits.6 GINI 35.1 34.06% 1.9 33.96% 1.9 6. profit from capital investments in unincorporated business and income received by people aged under 16 (HY110G)) minus regular taxes on wealth. social exclusion not elsewhere classified.4 6.3 34.2 6.20% Sources: Authors‟ calculations 2009 5. which incorporates the net components of household income without taking into account negative values for net cash benefits or losses from self-employment (including royalties).1 32.9 6. education-related allowances. Top income shares for Total net household income_no negative PY050N(HY010net_nn) Year 2002 2003 2004 2005 2006 2007 2008 TIS 1% 5.1% 1.30% 3.4 5. dividends.0 34.02% 3. housing allowances.30% 3.71% 3.5% 3.3 34. regular inter-household cash transfers received.6 GINI 35. company car.14% 1.0 35.4 33. components of personal income.9 5. regular inter-household cash transfer paid and tax on income and social insurance contributions.e.89% 0.2 5.99% 5. which is described as Total disposable household income (HY020): This variable includes income on household level taking into account.2 34. As noted in this section. The following table contains the estimations for these two measures according to Eurostat (data provided by ELSTAT) and according to authors calculations (for both variables) Table 7. family/children related allowances.1 6 5. sickness benefits. The ratio S80/S20 and Gini coefficient will be reviewed.1 6.1 6. unemployment benefits.7 33. this variable is slightly different in interpretation and in compilation procedure from the corresponding one („Total disposable household income (HY020)’) used by ELSTAT.Table 6.2 6.1 34.77% 3. therefore.49% 5.4 6. interests.8 6.38% 5.79% TIS 0. old-age benefits.2 5.3 33.1 HY010NET_NN 2002 2003 2004 2005 2006 2007 2008 2009 S80/S20 6.6 Gini 34.9 HY020 2002 2003 2004 2005 2006 2007 2008 2009 S80/S20 6.5 6.3 34. includes gross employee cash or near cash income.2 34.98% 6. Difference are also observed between ELSTAT „s press 22 .02% 0.3 33.8 35. It.6 34. also. gross cash benefits or losses from self-employment (including royalties).11% 3.0 6. Aggregate inequality measures HY020_Eurostat 2002 2003 2004 2005 2006 2007 2008 2009 S80/S20 6.2.80% 3.08% 3.2 5.59% 1. income from rental of a property or land.7 33 33. The concept of disposable income differs from the concept of net income but this is the only variable that can be used for international comparison. International experience The main variable used in this study for the estimation of income distribution is the ‘Total net household income_ no negative PY050N (HY010net_nn)’.4 34. 2009 means that the survey year is 2010) There are some differences for total disposable household income in the compilation but the trend is the same.15% TIS 0.8 34.9 5.2 5.30% 5.01% 5.5 Sources: Eurostat and authors‟ calculations Note 1: The year is the reference year (i. survivor' benefits.8 5.05% 1.

Slovenia. France. Slovakia and Finland plus the European Central Bank. also. Malta. Slovakia. Latvia. Bulgaria.9) and Gini is 33. Thus. the Netherlands. S80/S20_Total disposable household income 7 6 5 4 3 2 1 0 2004 2005 EU (27 countries) 2006 2007 Euro area (17 countries) 2008 Greece 2009 Source: Eurostat 10 According to press releases for the year 2003 (press release 2004): The S80/S20 is 6. Figure 22.0 (instead of 5. Italy. It is reminded that years correspond to reference years and not the years of survey. Greece. Portugal.1 (instead of 33) and for the year 2002 (press release 2003): The S80/S20 is 6. Finland. France. Slovenia. Greece. Cyprus. Lithuania. Austria. 12 The euro area (EA17) consists of 17 Member States: Belgium. The reason for the sort period for comparison is due to the lack of data for European averages. Sweden and the United Kingdom plus the European Central Bank and the EU institutions. Germany.releases (for years 2002 and 200310) and Eurostat ‟s data. Ireland. these differences should be taken into consideration for the international comparison. Malta. Poland. Denmark. Ireland. Germany. The differences. The following figures illustrate the ratio S80/S20 and Gini coefficient for total disposable household income for Greece and European Union 27 11 and Euro Area 1712. 23 . Estonia. Austria.6 (instead of 6. Estonia.7) 11 The European Union (EU27) consists of 27 Member States: Belgium. the Netherlands. Hungary. Italy. Luxembourg. from the total net household income are small but they exist. Spain.4) and 35. Cyprus. Spain. Portugal. Romania.1 (instead of 34. the Czech Republic. Luxembourg.

In any case Greece seems to suffer from intense aggregate income inequality for the European standards. The following figures illustrate analytical results for the year 2009 for the ratio S80/S20 and Gini coefficient. Latvia.Figure 23. S80/S20_Total disposable household income 2009 8 7 6 5 4 3 2 1 0 Denmark Latvia Germany Slovenia Malta Portugal Slovakia Greece Luxembourg EU (27 countries) Euro area (17 countries) Lithuania Netherlands Romania Hungary Belgium Sweden Austria Spain Cyprus Poland France Finland Ireland United Kingdom Bulgaria Czech Republic Estonia Italy Source: Eurostat 24 . whereas inequality is higher in Portugal. GINI_Total disposable household income 35 34 33 32 31 30 29 28 27 26 2004 2005 EU (27 countries) 2006 2007 Euro area (17 countries) 2008 Greece 2009 Source: Eurostat The empirical findings indicate that aggregate income inequality in Greece is in higher level than the average of both European Union and Euro area. Ireland and United Kingdom according to Gini and lower (Portugal is the same) according to S80/S20 ratio. Spain. In both cases Greece yield lower aggregate income inequality only from Lithuania. Romania and Bulgaria. Figure 24.

the distribution of consumption expenditures and they state that income information from HES is considered less reliable from ELSTAT. data of each HES are expressed in constant mid-year prices and then in 1974 constant prices. namely. Moreover. Other researchers utilize only consumption data [Sarris and Zografakis (2000)]. pensions. GINI_Total dispasable household income 2009 40 35 30 25 20 15 10 5 0 Source: Eurostat 4. interest payments dividends. 1998/99.3 for under 13 years. the definition of income includes the non-cash components.00 for head of household. 1993/94. Adjustments were made for the size of the household. also. cash benefits (net of tax paid).Figure 25. Moreover. 0. 25 . in-kind transfers from other households and fringe benefits). Results from other data sources The empirical findings from Household Expenditure Survey (HES) and European Community Household Panel (ECHP) micro data are presented in this section. Household Expenditure Survey (HES) It has been stated that micro data from Household Expenditure Survey (HES) have been utilized for the estimation of income inequality. such as wages. the equivalence scale used was 1. rents. other non-cash incomes (consumption of own farm and non-farm production. The concept of income includes monetary incomes from all sources. self-employment earnings. 1981/82.5 for other member above 13 years and 0. Nevertheless the conclusions do not differ substantially using the two distributions. 2004/05 and 2008. It should be noted that the authors compile. 1987/88. imputed rents. According to Mitrakos and Tsakloglou (2012) available data exist for the HES of 1974.

3 14.4 24.288 NA NA NA NA NA Sources: Mitrakos and Tsakloglou (2012).123 0.0 15.347 2004 0.5 12.9 12.1 9.0 25.340 0.6 12. Gini coefficient from HES micro data 1994 1999 GINI 0.1 7. UPPER SHARE 1% Table 11. Top Income Shares from HES micro data 1982 1988 1994 3.4 10.8 6. nevertheless. Total household income is taken to be all the net monetary income received by the household and its members at the time of the interview (t) during the survey reference year (t-1).2 8.9 6.3 10.The empirical results from income distribution are illustrated in the following tables13 INCOME SHARES 1 2 3 4 5 6 7 8 9 10 1974 2.9 9. 1988 and 1994 and with Tsakloglou and Mitrakos (1998) for 1994.3 12. 1% Top Income Share from HES micro data 1974 1988 1994 2.255 0.1 6. Aggregate inequality measures from HES micro data 1974 1982 1988 1994 GINI 0.8 7.1 2004 3.5 10.1 14. Mitrakos and Tsakloglou (2012) estimate the Gini coefficient without imputed personal income.322 THEIL (T) INDEX 0.279 1999 0.1 6.2 6. 1994 and 1999. As expected the coefficient is larger.0 5.177 0. education etc.2 7.3 Source: Mitrakos and Tsakloglou (2012) The aggregate inequality measures are summarized in the following table Table 9.0 7.309 0.2 2008 3.0 4.322 0. property and 13 The figures coincides with Mitrakos (2007) for the years 1974.274 0.0 5. 1988.314 0. 14 Eurostat refers duration of 8 years (1994-2001) 26 . Table 10.7 5.2 9.3 10.3 24.295 0.4 9.1 15.3 3.3 29.9 4.0 10. 1982. with Mitrakos (2003) for the years 1982.382 0. 1988. It should be noted.9 24.1 7.1 9.4 12.6 23.2 14.086 0.1 4.1 9.5 Source: Mitrakos (2007) European Community Household Panel (ECHP) The European Community Household Panel (ECHP) is a survey based on a standardized questionnaire covering a wide range of topics such as income.292 NA NA NA NA NA 2008 0. Mitrakos and Tsakloglou (1998) Furthermore.300 2004 0.176 0.5 5.170 MEAN LOGARITHMIC DEVIATION (N) 0.2 12.9 7.497 0. private income (from investments. 1994 and 2004.7 5.082 0. health.0 6.3 10.0 8.5) 0.325 2008 0.170 0.This includes income from work (employment and self-employment).163 ATKINSON INDEX (0.8 4.407 0.161 0.339 0.8 15.0) 0.0 3.0 8.1 8.0 1999 3.079 0. The survey was launched in 1994 and ended at 200214. Mitrakos (2005) (2003) (1999).0 14. with Mitrakos (1999) for the years 1974.079 ATKINSON INDEX (2.346 0.0 3.7 Table 8.2 3. the crossnational comparability and the longitudinal or panel design.274 0.1 8.310 Source: Mitrakos and Tsakloglou (2012) Another interesting aspect is that Mitrakos (2007) has compiled the 1% top income share based on HES data. that the shares in this study differ slightly from the previous ones presented.3 4. According to Eurostat the characteristics of ECHP is the multi-dimensional coverage.0 7.310 VARIANCE OF LOGARITHMS (L) 0.1 9.170 0.314 0. The definition of income refers to total household income.187 0.6 12.7 23.1 2004 3.0 8.

35 0.34 0.34 0.3 6. the amounts given here are per “equivalent adult”. Nevertheless the equivalence scale is only used when micro data are available Income: The definition of income is not the same.private transfers to the household). using the modified OECD equivalence scale. 0.5 6. receipts in kind and imputed rent for owneroccupied accommodation. The usage of grouped or micro data dictates the application of different statistical specification of the aggregate inequality indices (interpolation techniques have. The main differences can be categorized as follows Data sources: Grouped tax data.33 5.0 to the first adult.8 2001 0. Unit of analysis/ equivalence scale: The unit of analysis is the household in all cases. European Community Household Panel (ECHP) micro data and European Union Survey on Income and Living conditions (EU-SILC) micro have been used Methodology: There are certain variations in the methodology applied.5 6. It should be noted that equivalised income is defined on the household level. The year of the survey contains data for the previous year.6 6.33 6. results from other studies have been presented. studies using HES include also items of imputed person income - - - 27 .35 0. The empirical findings for the Gini coefficient and for the S80/20 ratio are presented in the following table: Year of Survey GINI S80/20 Table 12.3 to each child aged under 14 in the household. No account has been taken of indirect social transfers (such as the reimbursement of medical expenses). ELSTAT various bulletins Note: Year: Year of survey 5.35 0. Household Expenditure Survey (HES) micro data. Moreover. pensions and other social transfers directly received. thus survey for 2002 illustrates information for the year 2001. Comparisons In the previous sections different data sources and methodological approaches have been applied for the estimation of income inequality. This scale gives a weight of 1. Gini coefficient and ratio S80/20 from ECHP micro data 1995 1996 1997 1998 1999 2000 0.2 5. The household‟s total income is divided by its „equivalent size‟. Eurostat website. so that each person (adult or child) in the same household has the same equivalised income. been used in the case of grouped tax data). also. Moreover different compilation procedure was employed in the case of top income shares in tax data. In order to take into account differences in household size and composition in the comparison of income levels.6 Sources: Eurostat (2002).7 2002 0.35 6.5 to the second and each subsequent person aged 14 and over and 0.

Figure 26. As expected Gini from HES micro data (GINI_HES) yields the smaller values. From macroeconomic point of view. The following figure illustrates the results for the estimation of Gini coefficient from tabulated tax data and micro data from HES. ECHP and EU-SILC. GINI coefficient from various data sources 0.1 0 1957 1958 1959 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 GINI_HES_NI GINI_HES GINI_ECHP GINI_EU SILC GINI_TAX Sources: Authors‟ calculations.Despite these differences it is interesting to compare the empirical findings from a macroeconomic point of view. since it includes non cash components. ELSTAT various bulletins. Mitrakos (2005) (2003) Note 3: Gini_ECHP: Gini from ECHP micro data .6 0. Mitrakos and Tsakloglou (2012) (1998). On the contrary a decreasing trend exists for the period 1999- 28 . The coefficient is both lower (1994) and higher (1999) compared with the corresponding one from ECHP data (GINI_ECHP). Eurostat (2000) (2003) Note 1: Gini_HES_NI: Gini from HES micro data with no imputed personal income items . Data from HES with no imputed personal income (GINI_HES_NI) result in higher values of the coefficient. ELSTAT various bulletins Note 4: Gini_EU SILC: Gini from EU-SILC micro data – authors„ calculations Note 5: Gini_TAX: Gini from grouped tax data – authors„ calculations The Gini coefficient derived from tabulated tax data (GINI_tax) is in higher level in all cases.5 0. Furthermore. Gini is higher (compared to HES in 2004 and 2008) when is derived from EU-SILC micro data (GINI_EU SILC). apart from the level.4 0.Mitrakos and Tsakloglou (2012) Note 2: Gini_HES: Gini from HES micro data . Mitrakos (2005) (2003). According to HES data. Eurostat website.3 0.Mitrakos and Tsakloglou (2012) (1998). For the period 1982-1999 the level of the income inequality does not alter significantly.Eurostat (2002).2 0. there is an impressive decrease from 1974 to 1982. the behavior of the coefficient is important.

The coefficient derived from EU-SILC micro data yields a rather constant pattern until 2006 and presents a slight decrease until 2009. The following figures illustrate the results for the estimation of the upper shares of income distribution from tabulated tax data and micro data from HES and EU-SILC. Micro data from ECHP indicate a relative constant trend for the period 1994-2001. Mitrakos (2003) 15 According to Mitrakos and Tsakloglou (2012) this trend is not supported for the period 2004-2008 from the expenditure distribution 29 . The pattern is similar for Gini from tax and HES data for the period 1982-1988. The upward trend seems to take place from the early 1990s.1 0.200815. Mitrakos (2007) (2003) Note 1: HES_10%: 10% TIS from HES micro data .25 0.5% and 0.3 0. Figure 27.05 0 1957 1958 1959 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 HES_10% HES2_10% EU-SILC-10% TIS_10% Sources: Authors‟ calculations. The trend is similar for HES data when imputed personal income is not included for the period 1994-2008: a small increase is detected for 1994-1999 followed by a small decrease for the remaining period.Mitrakos and Tsakloglou (2012) (1998). Mitrakos and Tsakloglou (2012) (1998).15 0. The Gini coefficient from tabulated tax data implies an increase of inequality. Similarities in the behavior exist for the period 2000-2009 for all cases (with small variations as described previously). being relatively steady in the previous period. as already stated the levels of the coefficient in this case is higher. The 10%.35 0. 0.2 0.1% top income shares are presented (only the first two cases are available for HES data). 10% top income shares from various data sources 0. 1% .

1994 and 2004. 0. The level is relatively constant until the late sixties. The level of 10% top income share is around 26% with lower value in 2003 (25.4%). The following figure illustrate the empirical findings for the 1%. EUSILC values are above HES values both in 2004 and 2008 (years that HES data are available). The corresponding values derived from EU-SILC micro data are in lower level for 2002-2005 and higher for 2006-2009. The level of 10% top share from HES micro data is higher until 1994 and lower for the remaining period.1% of top income shares. In the beginning of the next decade the income share of the 10% rises exceeding the initial levels. An interesting aspect is that the values between tabulated tax data and micro data from HES and EU-SILC do not yield such differences as in the case of Gini coefficient.1%) and then a decrease from 2004 onwards (23. 1988. In general the trend for the period 1982-2008 is rather constant. 30 .3%).3%) and then it remains relatively stable for the period 1982-1994 (between 24%-24.3) is detected for the period 1994-2008. Micro data from EU-SILC indicate a relative constant trend (with successive ups and downs) for the period 2002-2009. after this period there is an increase for some years.Note 2: HES2_10%: 10% TIS from HES micro data . A slight increase in 1999 (25.2%.5% and 0.2 and 23.Mitrakos (2007) Note 3: EU SILC_10%: 10% TIS from EU-SILC micro data – authors„ calculations Note 4: TIS_10%: 10% TIS from grouped tax data – authors„ calculations The top 10% derived from micro HES data is around 30% in 1974. The top 10% share derived from tabulated tax data [according to Piketty (2001) approach] initiates from a value of 21% and ends up around 26. Similar is the trend for HES data from Mitrakos (2007) with slightly increased values for the years 1974. Moreover.3%) and higher value in 2006 (27. From the mid 1970s the share declines and is in the level of 21%-22% until the end of 1980s. This trend seems to be interrupted in 20022003. drops drastically in 1982 (24.

EU-SILC data indicate a small decrease from 2002 to 2003 and then a gradual increasing trend which seems to be interrupted in 2008.5 % and 0. 31 . Data from EU-SILC yield a different pattern compared to the tax data for the period 2002-2009 despite the fact that values are quite similar for 20062007 and 2009. during this decade the top 1% is around 4%.07 0.5%-0.5% .65%.1%: 1% .0. The 0.1% TIS_1% TIS_0.Mitrakos (2007) Note 2: EU SILC_1%-0.09 0. both empirical findings indicate a decrease from 1974 to 1982 and then a relative constant pattern for 1982-1994.5%). This trend seems to be interrupted in 2002-2003.5% .5% in 1982. 2007 onwards pattern and values are similar. This trend remains until the beginning of 1980s.Figure 28.08 0. the values from HES compared to tax data are in higher level for the period 1974-1994.06 0.5%-0.0.1% top income shares are available only for tax and EU-SILC data.5% TIS_0.1% TIS from grouped tax data – authors„ calculations The 1% top share from HES data is 7.02 0.1% from various data sources 0.5% upper share until 2006 (decrease for tax data and increase for EU-SILC data).03 0.05 0. The pattern differs for 0. The top 1% share from tabulated tax data initiates from a value of 7.5% EU-SILC-0.1%: 1% . In the beginning of the next decade the income share of the 1% rises without nevertheless reaching the initial levels. Nevertheless.5%-0.4%) and it decrease for the period 1988-2004 (4.04 0.5% and ends up around 5. tax data suggests an increase afterwards while HES data indicate a further decrease. The level is relatively constant until the late sixties. TIS 1%-0. Once again.8% in 1974 and drops to 5. The trend is similar in this period.1% Sources: Authors‟ calculations and Mitrakos (2007) Note 1: HES_1%: 1% TIS from HES micro data .0.0.1% TIS from EU-SILC micro data – authors„ calculations Note 3: TIS_1%-0. It remains virtually unchanged for 1984-1988 (5.01 0 1957 1958 1959 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 HES_1% EU-SILC-1% EU-SILC-0. after this period a slow but steady decline emerges.

According to the empirical findings. but the conclusions differ due to the quite different reference period. Our results were compared with data from Standardized World Income Inequality Database (SWIID) compiled by Solt (2009). It should be noted that the results are not totally comparable since the data sources and the methodology differs and the substantial existing inconsistencies should be taken into consideration. Livada and Tsakloglou (1993). Nevertheless. as reported annually in tax declaration forms. This definition also includes single persons. 6. Atkinson Index ( ) (ε=0. Tax data provide detailed information on nominal family income and its sources. indicate an upward trend for the period 19572009. Dimelis and Livada (1994)]. Taking into consideration the issues addressed for the data seven indices have been estimated16: Gini Coefficient (G). The second group includes countries from Central and North Europe (Germany. empirical findings from other studies have been presented and compared. The OLS models with correction term AR(1) do not face significant issues with autocorrelation and heteroscedascicity. Atkinson Index ( ) (ε=1. whereas GE(2) indicate a decline followed by an increase (explaining thus the quadratic model of description). Livada (1991). The comparison of Gini „s estimates for Greece is conducted with two country groups. Family income is the sum of income received by the husband and/or wife. Both pattern and values for the period 20062009 are quite comparable. Various data sources and statistical techniques have been used for the compilation of aggregate and disaggregate measures of income inequality. Furthermore. 16 Interpolation techniques according to Cowell and Mehta (1982) were applied in order to tackle the issue of grouped data 32 .5). Relative Mean Deviation (M).1% does not differ.The behavior of 0. All summary inequality measures. Spain. The mathematical results are similar to previous studies [Livada (1988). Conclusions This section provides empirical evidence for income inequality in Greece. six indices indicate an increase of income inequality while one (GE (2)) indicates the opposite (decrease). General Entropy (0) [GE(0) Theil‟s L or Mean Log Deviation) (a=0)]. The first group consists of South European countries such as Italy. Switzerland. the value of GE(2) never reached its initial level. except GE(2). Tabulated tax data for the period 1957-2009 have been utilized for the compilation of aggregate income inequality measures. General Entropy (1) [GE(1) Theil‟s T) (a=1)] and General Entropy (2) [GE(2) monotonic transformation of Coefficient of Variation CV) (a=2)]. Portugal and France (although France could be considered part of Central Europe).5).

since it incorporates the net components of household income without taking into account negative values for net cash benefits or losses from self-employment (including royalties). The time period of the analysis is from the year 2002 to the year 2009. In all cases the absolute values are slightly changing in both directions (increase or decrease). while it was a „medium‟ case in the previous period. of 0. Atkinson_1.5% of income. The broader conclusion could be that after the mid 1990s aggregate income inequality in Greece is in high levels compared with other countries. Eighteen (18) variables were compiled. This element. assigns a value of 1 to the household head. also.5. General Entropy_1. The indices that indicate the gap between the income shares of certain portions of population are S80/S20 and S90/S10.according to the topic .have been used for income inequality analysis. Atkinson_0. Therefore.Netherlands and Sweden) as well as UK and USA. first proposed by Haagenars et al. General Entropy_0. EU SILC data contain information for various components of income. nevertheless the trend is not stable for the whole period. This scale. According to the empirical results. which is more apparent from 2009. General Entropy_2 and Coefficient of Variation) is rather stable with miniscule decline. implies a miniscule decline in inequality in the beginning of economic recession in Greece. The decrease is more obvious in the year 2009 especially for S90/S10. This survey includes micro data on income on household and personal level that can be used for the estimation of income distribution. This implies that the recession. Nevertheless. The later is 33 . several variables that approach the concept of income have been calculated. the average income illustrates an increasing trend. The behavior of the aggregate inequality indices (GINI. It has been adjusted for the size of household and the age of the members of household with the OECD-modified scale. nevertheless.5. while the lower 10% is recipient of approximately 2. Though. seems to affect more the upper income classes. since no data are available for the rest period of economic crisis this aspect is under scrutiny. departing from 9. in all cases a small decrease is noted from 2008 to 2009. The variable used for the estimation of income distribution is slightly different in interpretation and in compilation procedure from the corresponding one („Total disposable household income (HY020)‟) used by ELSTAT.756 € in 2002 and resulting in 13. (1994). but the trend of the increase is considerably less intense since Greece had already entered recession. The level of 2009 is not lower compared to the corresponding one of 2008.5 to each additional adult member and of 0.503 € in 2009. The most appropriate . due to the absence of data for the rest of the period of economic crisis no firm conclusions can be drawn. The variable used for the estimation of income distribution is the „Total net household income_ no negative PY050N (HY010net_nn)‟. These variables have been utilized to estimate the distribution of income in the whole population. The 10% income share yields approximately 26% of the generated income.3 to each child. Another data source is the European Union Survey on Income and Living Conditions (EU SILC). which is simply the ratio between the income share of upper and lower income classes. There has been a small decrease in both indices.

19 The euro area (EA17) consists of 17 Member States: Belgium. Data from HES with no imputed personal income result in higher values of the coefficient. Slovakia. there is an impressive decrease from 1974 to 1982. Slovenia. Gini is higher (compared to HES in 2004 and 2008) when is derived from EU-SILC micro data. Sweden and the United Kingdom plus the European Central Bank and the EU institutions. The coefficient is both lower (1994) and higher (1999) compared with the corresponding one from ECHP data. Luxembourg. Greece. Ireland. Nevertheless the conclusions do not differ substantially using the two distributions.used in the international comparison for consistency reasons17. The trend is similar for HES data when imputed personal income is not included for the period 1994-2008. Estonia. Slovakia and Finland plus the European Central Bank. For the period 1982-1999 the level of the income inequality does not alter significantly. 20 Mitrakos and Tsakloglou (2012) compile. Ireland and United Kingdom according to Gini and lower (Portugal is the same) according to S80/S20 ratio. Furthermore. unit reference/equivalence scale. The Gini coefficient derived from tabulated tax data is in higher level in all cases. Micro data 17 18 Small differences exist between ELSTAT and Eurostat data (see section 3. Luxembourg. Germany. Romania and Bulgaria. The reason for the sort period for comparison is due to the lack of data for European averages. Furthermore analytical results for the year 2009 for the ratio S80/S20 and Gini coefficient are presented. Austria. since it includes non cash components. Hungary. also. presented. Denmark. In both cases income data are used20. Despite the differences (data sources. The ratio S80/S20 and Gini coefficient for total disposable household income for Greece and European Union 2718 and Euro Area 1719 are compared. Cyprus. According to HES data. Portugal. also. On the contrary a decreasing trend exists for the period 1999-200821. Italy. Romania. Spain. Latvia. 21 According to Mitrakos and Tsakloglou (2012) this trend is not supported for the period 2004-2008 from the expenditure distribution 34 . Apart from the level. the distribution of consumption expenditures and they state that income information from HES is considered less reliable from ELSTAT. Spain. the Netherlands. specifically for the Gini coefficient and the top income shares. Spain. Slovenia. even though the impact of the excluded element is minuscule. Finland. Austria. Italy. In both cases Greece yield lower aggregate income inequality only from Lithuania. Germany. France. Latvia. In any case Greece seems to suffer from intense aggregate income inequality for the European standards. As expected Gini from HES micro data yields the smaller values.4) The European Union (EU27) consists of 27 Member States: Belgium. the behavior of the coefficient is important. the Czech Republic. Ireland. Empirical findings from studies that utilize Household Expenditure Survey (HES) and European Community Household Panel (ECHP) micro data are. France. Bulgaria. Portugal. methodological differences such as compilation procedure. Estonia. The empirical findings indicate that aggregate income inequality in Greece is in higher level than the average of both European Union and Euro area. Lithuania. Greece. Malta. definition of income) a comparison was conducted for empirical findings. Other researchers utilize only consumption data [Sarris and Zografakis (2000)]. the Netherlands. whereas inequality is higher in Portugal. Poland. Cyprus. Malta.

The Gini coefficient from tabulated tax data implies an increase of inequality. nevertheless differs in the remaining period. This view is consistent with Leigh (2007) that top income shares may be a useful substitute for other measures of inequality. Finally top income shares yield similar trend (for certain periods) and level (to the possible extend) regardless the data sources. The pattern of tax and HES data is rather similar for the period 1974-1994. with the values in the latter case being in higher level. being relatively steady in the previous period. 35 . the trend. An interesting aspect is that the values of top income shares between tabulated tax data and micro data from HES and EU-SILC do not yield such differences as in the case of Gini coefficient.from ECHP indicate a relative constant trend for the period 1994-2001. The upward trend seems to take place from the early 1990s. but in the latter years (after 2006) the estimates are quite similar.e. Similarities in the behavior exist for the period 2000-2009 for all cases (with small variations as described previously). The trend for tax and EU-SILC data is not the same for the limited years both data exist. This view is not supported by estimates derived from other data sources (i. HES). These findings imply that different data sources and/or methodological approaches could lead to different conclusions for the direction and/or level of aggregate income inequality. The coefficient derived from EU-SILC micro data yields a rather constant pattern until 2006 and presents a slight decrease until 2009. The pattern is similar for Gini from tax and HES data for the period 1982-1988. The level of aggregate inequality differs from other empirical results. To sum up we could say that empirical evidence from tabulated tax data indicates an increase on aggregate income inequality.

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