VOLUME XXI
AUTUMN 2013

THE STRUCTURE OF INCOME INEQUALITY IN THE LONG TERM
 
MARTA ADIEGO
Instituto de Estudios Fiscales, EQUALITAS
LUIS AYALA
Umiversidad Rey Juan Carlos, EQUALITAS
 
This paper aims at providing answers to questions like: What changes have taken place in income inequality since 1990? Which factors have the largest influence on these changes? To what extent are the results sensitive to the choice of a particular dataset? We use data from the Family Budget Survey (2006) –the first wave of this survey that was collected– and compare it with 1990 data. To test the sensitivity of the results, we also use expenditure data from this survey and income data from the Survey of Income and Living Conditions. A regression-based approach is used to account for changes in inequality [Fields (2003), Yun (2006)]. Our findings show that the reduction in inequality has become more modest in the past two decades. Other results are a marked stability of the income structure by population sub-groups and the high contribution of educational attainment and the labour force status of the household. One of the most relevant forces driving inequality changes has been the fall in the wage skill premium.
 
Key words: inequality, regression-based decomposition, Family Budget Survey.
JEL Classification: D31, D63.

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