Must Capital Income Increase Long-Term Inequality? Evidence from Sweden 1991–2021

Andreas Bergh () and Martin Nordin
Additional contact information
Andreas Bergh: Department of Economics, Lund University, and, Postal: Research Institute of Industrial Economics, Box 55665, SE-102 15 Stockholm, Sweden, https://www.ifn.se/en/researchers/ifn-researcher/andreas-bergh/
Martin Nordin: AgriFood Economics Centre and Department of Economics, Postal: Lund University

No 1543, Working Paper Series from Research Institute of Industrial Economics

Abstract: Capital income is known to increase income inequality when measured on an annual basis, but the role of personal capital income in long-run inequality is rarely studied. Theoretically, capital income can increase or decrease long-term inequality depending on the correlation with other income. We examine, using Swedish register data, the evolution of annual and long-term income inequality in Sweden 1991–2021, using disposable income with and without capital income. Capital income had a marginally equalizing effect on long-term inequality for the period 1991 to 2006 but added substantially to long-term inequality for the period 2007 to 2021. To fully understand the distributional effects of capital income, a long-term perspective is needed.

Keywords: Income distribution; Capital income; Inequality; Register data (search for similar items in EconPapers)
JEL-codes: D31 D63 E22 (search for similar items in EconPapers)
Pages: 12 pages
Date: 2025-11-24
New Economics Papers: this item is included in nep-fdg
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.ifn.se/wfiles/wp/wp1543.pdf Full text (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:hhs:iuiwop:1543

Access Statistics for this paper

More papers in Working Paper Series from Research Institute of Industrial Economics Research Institute of Industrial Economics, Box 55665, SE-102 15 Stockholm, Sweden. Contact information at EDIRC.
Bibliographic data for series maintained by Elisabeth Gustafsson ().