The Suitability of Tax Data to Study Trends in Inequality. A Theoretical and Empirical Review with Tax Data from Switzerland

Oliver Hümbelin () and Rudolf Farys ()

No 16, University of Bern Social Sciences Working Papers from University of Bern, Department of Social Sciences

Abstract: In many countries results of inequality trends are ambiguous, because different methodological approaches blur the picture or because reliable data are not available. In this paper we assess whether tax data are suitable for inequality trend analysis. We do this by comparing tax data measurement concepts concerning income definition, statistical units and population coverage to theoretical ideal concepts. To get a sense of direction and magnitude of potential biases, we estimate the impact of tax data-related methodological options for inequality measures with Swiss tax data. Where possible and meaningful, we compare tax data results to corresponding results from surveys. While there are clear advantages of tax data like long-term availability and reliable population coverage in more recent years, there are also drawbacks that lead to an overestimation of inequality and hinder comparability over time. In sum, tax data are a source that should be used with care, but nonetheless seem to be indispensable for inequality analysis. As a substantive result for Switzerland, our tax data analysis raises doubts about the declining inequality trend reported by survey data for the last decades.

Keywords: Tax Data; Inequality Trend; Income Distribution; Switzerland (search for similar items in EconPapers)
JEL-codes: D31 H24 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2015-11-30
New Economics Papers: this item is included in nep-eec, nep-pbe and nep-pub
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://repec.sowi.unibe.ch/files/wp16/Huembelin-Farys-Taxdata-2015.pdf First version, 2015 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bss:wpaper:16

Access Statistics for this paper

More papers in University of Bern Social Sciences Working Papers from University of Bern, Department of Social Sciences
Bibliographic data for series maintained by Ben Jann ().