Joint Income-Wealth Inequality: Evidence from Lucerne Tax Data

David Gallusser () and Matthias Krapf
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David Gallusser: University of Basel

Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, 2022, vol. 163, issue 1, No 10, 295 pages

Abstract: Abstract Using tax data from the Swiss canton of Lucerne, we study how measures of economic inequality change if they account for income and wealth rather than income alone. Joint income-wealth, the sum of labor income and annuitized wealth, serves as a measure of combined inequality of income and wealth. Inequality measured using joint income-wealth is higher than measured using income alone. We refine existing annuitization techniques by introducing heterogeneous returns. The joint distribution of labor income and annuitized wealth displays strong tail dependence at the top and a negative association for negative annuitized wealth. A decomposition shows that the underlying marginal distributions of labor income and annuitized wealth account for most of joint income-wealth inequality, whereas their association matters only in the tails.

Keywords: Inequality; Income; Annuitized wealth; Tax data (search for similar items in EconPapers)
Date: 2022
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DOI: 10.1007/s11205-022-02887-9

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