Journal Article
Top incomes and inequality in the UK: reconciling estimates from household survey and tax return data
Authors
Publication date
Apr 2018
Summary
We provide the first systematic comparison of UK inequality estimates derived from tax data (World Wealth and Income Database) and household survey data (the Households Below Average Income [HBAI] subfile of the Family Resources Survey). We document by how much existing survey data underestimate top income shares relative to tax data. Exploiting the flexibility that access to unit-record survey data provides, we then derive new top-income-adjusted data. These data enable us to: better track tax-data-estimated top income shares; change the definitions of income, income-sharing unit, and unit of analysis used and thereby undertake more comparable cross-national comparisons (we provide a UK-US illustration); and examine UK inequality levels and trends using four summary indices. Our estimates reveal a greater rise in the inequality of equivalized gross household income among all persons between the mid-1990s and late 2000s than shown by the corresponding HBAI series, especially between 2004/05 and 2007/08.
Published in
Oxford Economic Papers
Volume and page numbers
70 , 301 -326
DOI
https://doi.org/10.1093/oep/gpx041
Subjects
Households, Economics, Income Dynamics, and Taxation
Notes
© Oxford University Press 2017; Open Access; This is an Open Access article distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted reuse, distribution, and reproduction in any medium, provided the original work is properly cited.
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