Changes in income inequality in Lithuania: the role of policy, labour market structure, returns and demographics

Nerijus Černiauskas, Denisa Sologon, Cathal O’Donoghue () and Linas Tarasonis
Additional contact information
Cathal O’Donoghue: The National University of Ireland, Galway
Authors registered in the RePEc Author Service: Cathal O'donoghue

No 71, Bank of Lithuania Working Paper Series from Bank of Lithuania

Abstract: We model the household disposable income distribution in Lithuania and explore the drivers of the increase in income inequality between 2007 and 2015. We quantify the contributions of four factors to changes in the disposable income distribution: (i) demographics; (ii) labour market structure; (ii) returns and prices; and (iv) tax-benefit system. Results show that the effects of the factors were substantial and reflected heterogeneous developments over two sub-periods: changes in the tax and benefit system successfully accommodated a rapid rise in market income inequality due to the global financial crisis during 2007-2011, but failed to do so during the subsequent years of economic expansion, when rising returns in the labour and capital markets significantly increased disposable income inequality. We also find that declining marriage rates contributed to the increase of income inequality in Lithuania.

Keywords: income distribution; inequality; decompositions; microsimulation; tax-benefit policies; crisis; austerity; overtime comparison (search for similar items in EconPapers)
JEL-codes: D31 H23 I38 J21 J31 (search for similar items in EconPapers)
Pages: 43 pages
Date: 2020-01-24
New Economics Papers: this item is included in nep-lma
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://www.lb.lt/uploads/publications/docs/24236_ ... 960cb210960918b0.pdf Full text (application/pdf)
Our link check indicates that this URL is bad, the error code is: 403 Forbidden

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:lie:wpaper:71

Access Statistics for this paper

More papers in Bank of Lithuania Working Paper Series from Bank of Lithuania Bank of Lithuania Gedimino pr. 6, LT-01103 Vilnius, Lithuania. Contact information at EDIRC.
Bibliographic data for series maintained by Aurelija Proskute ().