Sweden

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Overview of Trends of Economic Inequality in Sweden

 

Has the dispersion of earnings been increasing in recent decades?Yes, the top decile of earnings has risen from 146 per cent of median in 1983 to 166 per cent in 2011.
Has overall inequality increased in recent years?Yes, the Gini coefficient for equivalised disposable income is 10 percentage points higher in 2011 than in 1982.
Have there been periods when overall inequality fell for a sustained period?Yes, much of twentieth century up to 1980s.
Has poverty been falling or rising in recent decades?Rising. Relative poverty rate has doubled since 1995.
Has there been a U-pattern for top income shares over time?Yes, top gross income shares fell from 1916 to 1980 and then rose.
Has the distribution of wealth followed the same pattern as income?Similar till the end of 1980s. Top wealth shares show a downward trend from 1923 to end of 1980s; now levelled off.
Additional noteworthy featuresIncrease in overall inequality: during 1990s the average Gini was 25.5 while in the first decade of the twenty first century the average of Gini rose to 30. Top shares series have a break in 1971 (change in tax unit definition).

Sources and References

Sources for the historical data series:

Overall inequality: Gini coefficient of equivalised disposable income from 1975 from the website of Statistics Sweden, Distribution of income 1975-2011 (older series), Household finances, Inkomstfördelningsundersökningen, linked backwards at 1988 using ratio of 1989-rev to 1989 values; earlier series from 1951 to 1973 for family market income from Björklund and Palme (2000, Table 2) linking tax register data for 1951 and 1956 to data from the Swedish Level of Living Survey for 1967 and 1973.

Top income shares: Shares of top 0.1 and top 1 per cent in total gross income (of tax units) from WTID, based on work of Roine and Waldenström (2010). It is worth noting that the concept of tax unit has changed from married couples (filing a joint tax return) to individuals (whether married or not filing tax returns separately) in 1971 (although there was an option to file separate returns from 1966).

Poverty: Percentage of individuals living in households with equivalised disposable income less than 60 per cent of the median from 1991 from Income Distribution Survey (IDS) 2008 in Statistiska Meddelanden, HE 21 SM 1001, Table 24, page 32, and IDS 2005, Table 22, page 29, and IDS 2003, Table 27, page 35, and since 2009 from Statistics Sweden website, Household Finances (as above); earlier figures for percentage of individuals living in households below Swedish Welfare Board line from Table 2.

Individual earnings: Based on series given in Atkinson (2008, Appendix Q, Table Q.5), from 2005 from OECD iLibrary, Employment and Labour Market Statistics, Gross earnings decile ratios.

Wealth: Share of top 1 per cent in total net marketable wealth at market values from Roine and Waldenström (forthcoming) drawing from Roine and Waldenström (2009, Table A1).

References:

  • Atkinson, A B, 2008, The changing distribution of earnings in OECD countries, Oxford University Press, Oxford.
  • Björklund, A and Palme, M, 2000, “The evolution of income inequality during the rise of the Swedish welfare state 1951 to 1973”, Nordic Journal of Political Economy, vol 26: 115-128.
  • Roine, J and Waldenström, D, 2009, “Wealth concentration over the path of development: Sweden, 1873-2006”, Scandinavian Journal of Economics, vol 111: 151-187.
  • Roine, J and Waldenström, D, 2010, “Top incomes in Sweden over the twentieth century” in A B Atkinson and T Piketty, editors, Top incomes: A global perspective, Oxford University Press, Oxford.
  • Roine, J and and Waldenström, D, forthcoming, “Long run trends in the distribution of income and wealth” in A B Atkinson and F Bourguignon, editors, Handbook of Income Distribution, volume 2, Elsevier, Amsterdam.