The Dynamics of Inequality and Mobility: A Panel Data Analysis of the Spanish Income Tax

Author:

Martín‐Legendre Juan Ignacio1ORCID,Castellanos‐García Pablo1ORCID,Sánchez‐Santos José Manuel12ORCID

Affiliation:

1. Department of Economics University of A Coruña A Coruña Spain

2. ECOBAS Vigo Spain

Abstract

AbstractObjectiveThis article aims to analyze the evolution of income inequality and mobility in Spain during the period 1999–2011 by exploiting data from personal income tax returns.MethodsTo assess the evolution of inequality over the period analyzed, we have used some of the many metrics developed for this purpose, each of which offers a different approach depending on the segment of the income distribution they focus on (Gini coefficient, income shares, generalized entropy index, and the Atkinson class of measures).ResultsOur results suggest that, after a period of slightly declining income inequality, Spain experienced a rise in inequality in the years immediately preceding the Great Recession, before falling back to precrisis levels. With regard to income mobility, during this period, it was more common for individuals in the middle of the distribution to experience changes, while those at the top and bottom maintained a more stable position.ConclusionsThe economic boom of the late 1990s and early 2000s, as well as the Great Recession, had a significant impact on income inequality and mobility.

Funder

Ministerio de Economía y Competitividad

Consellería de Cultura, Educación e Ordenación Universitaria, Xunta de Galicia

Publisher

Wiley

Reference58 articles.

1. Income Inequality and Income Mobility in the Scandinavian Countries Compared to the United States

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3. Income, consumption and wealth inequality in Spain

4. Top Incomes in the Long Run of History

5. Auten G. andG.Gee.2007. “Income Mobility in the U.S.: Evidence from Income Tax Returns for 1987 and 1996.” Office of Tax Analysis Paper 99. Washington D.C.: U.S. Department of the Treasury.

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