Iceland

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Overview of Trends of Economic Inequality in Iceland

 

Has the dispersion of earnings been increasing in recent decades?Yes, earnings dispersion appears to be on the rise since the 1980s. Evidence is however limited.
Has overall inequality increased in recent years?Yes, the Gini coefficient has increased by 5.5 percentage points in the run-up of the crisis and then fell by 4 percentage points.
Have there been periods when overall inequality fell for a sustained period?Limited evidence
Has poverty been falling or rising in recent decades?Limited evidence
Has there been a U-pattern for top income shares over time?Limited evidence
Has the distribution of wealth followed the same pattern as income?No evidence.
Additional noteworthy featuresEffect of financial bubble and crisis.

Sources and References

Sources for the historical data series:

Overall inequality: Gini coefficient for equivalised household disposable income from EU-SILC, Eurostat website.

Top income shares: Shares of top 1 and 5 per cent in equivalised disposable income, including capital gains, after direct taxation and benefits, from Olafsson and Kristjansson (2010, Figure 6).

Poverty: Percentage of individuals living in households with equivalised (EU scale) disposable income below 60 per cent of the median from EU-SILC, Eurostat website; for 1986-1995 (with 50 per cent of the median) from Ólafsson and Sigurðsson, (1996, Figure 2).

Individual earnings: Earnings at top decile from OECD iLibrary, Employment and Labour Market Statistics, Gross earnings decile ratios; Gini coefficient for employment earnings from Ólafsson, S and Sigurðsson (1996, Figure 2).

Wealth: no suitable data were found.

References:

Ólafsson, S and Kristjánsson, A S, 2010, “Income inequality in a bubble economy”, Luxembourg Income Study conference, Luxembourg.

Ólafsson, S and Sigurðsson, A S, 1996, “Poverty in Iceland” in A Puide, editor, Den nordiska fattingdomens utveckling och struktur, Tema Nord, Copenhagen.