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Inequality in Greece: An Analysis by Income Source

Christos Papatheodorou

STICERD - Distributional Analysis Research Programme Papers from Suntory and Toyota International Centres for Economics and Related Disciplines, LSE

Abstract: This paper employs a decomposition analysis of inequality by income source to understand and explain particular aspects of income inequality in Greece. The results suggest that entrepreneurial income is the most significant contributor to overall inequality in Greece. It is also shown that there is a weak redistributive impact of taxes and social security contributions and this is mainly attributed to tax evasion, particularly in entrepreneurial income. The decrease of the inequality of entrepreneurial income appears to be the most effective way of reducing total inequality. Overall this analysis may help to establish links between the functional and personal income distribution. Therefore, our ability to evaluate and predict the potential implications of particular growth policies to inequality, poverty and, consequently, to social development, is significantly improved.

Keywords: Inequality; income distribution; decomposition analysis; income sources; income taxes; tax evasion; development; Greece (search for similar items in EconPapers)
Date: 1998-07
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