Factors of the income inequality in the Baltics: income, policy, demography

Publication type:

EUROMOD Working Paper Series

Series Number:

EM11/17

Author

Jekaterina Navicke

Publication date

31 May 2017

Abstract

This paper aims to disentangle the driving factors behind the changes in income inequality in the Baltics since the EU accession, distinguishing between primary income effect, discrete changes in tax-benefit policies and demographic effect. Evaluation of the three effects was based on counterfactual scenarios, which were constructed using taxbenefit microsimulation and re-weighting techniques. Decomposition of the total change in inequality showed that income and policy effects are dominant in the Baltics. Policy effects were inequality reducing before the crisis and for the period after the EU accession as a whole. Income effects were inequality increasing before the crisis and as a whole. Despite rapid demographic changes in the Baltics, the demographic effects on income inequality were marginal and in general inequality-increasing. Currently not available for downloading (due to publishing restrictions). Please contact the author to request a copy (jekaterina.navicke@fsf.vu.lt)