Inequality and dynamics of earnings and disposable income in Denmark 1987–2016

Søren Leth‐Petersen and Johan Sæverud

Quantitative Economics, 2022, vol. 13, issue 4, 1493-1526

Abstract: We document facts about earnings and disposable income inequality and growth in Denmark in the period 1987–2016. During this period, the distribution of log earnings growth exhibits skewness that varies with the business cycle and has strong excess kurtosis. Denmark has a progressive income tax system with a high level of taxes and a relatively generous and heavily subsidized unemployment insurance system. Consequently, the dispersion of log disposable income growth is much smaller than for earnings, and the distribution exhibits very limited skewness and much reduced excess kurtosis. These results emphasize the importance of distinguishing between earnings and disposable income when modeling income dynamics, and they suggest that the Danish welfare state plays an important role in reducing the impact of earnings fluctuations on disposable income.

Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://doi.org/10.3982/QE1843

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:wly:quante:v:13:y:2022:i:4:p:1493-1526

Ordering information: This journal article can be ordered from
https://www.econometricsociety.org/membership

Access Statistics for this article

More articles in Quantitative Economics from Econometric Society Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().