THE IMPACT OF CAPITAL GAINS ON THE DISTRIBUTION OF INCOME IN BELGIUM

Peter Praet

Review of Income and Wealth, 1980, vol. 26, issue 4, 419-429

Abstract: In an earlier paper, we presented estimates of capital gains for a number of categories of assets owned by Belgian households. The purpose of the present paper is to see how the distribution of disposable income between socio‐economic groups is modified when one adopts a “broadened” definition of income which includes capital gains corrected for losses of purchasing power. The main result of the study is that at current prices, the adoption of a broadened definition of income strongly increases disparities between socio‐economic groups. However, when one takes into account losses in purchasing power, conclusions differ according to the period analyzed. For the years 1953–68, it appears that the distribution of broadened disposable income is more unequal than the distribution of disposable income. For the years 1969–77 when inflation was high, the adoption of a broadened definition of income has reduced disparities, with the important exception of old age pensioners.

Date: 1980
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