November 17, 2020
Written by WID.world

Distributional National Accounts (DINA) for Austria

Distributional National Accounts (DINA) for Austria, 2004-2016

In this paper, Stefan Jestl and Emanuel List use survey data, tax data, and national accounts data in order to provide a detailed distributional national accounts series for Austria for the period 2004-2016. Using this series, they present a thorough analysis of how the global financial and economic crisis affected the Austrian income distribution and shed light on the redistributive effects of the Austrian welfare state. By using detailed survey data, they can also show how the initial income distribution changes when they apply the DINA methodology.

 

Key Findings

  • Unequal growth in pre-tax income – Before the global financial and economic crisis, growth in pre-tax income for the top 10 percent outperformed the growth of other income groups. After the crisis, however, this pattern changed: growth in pre-tax income for the top 10 percent turned negative, while the rest of the income distribution faced income stagnation.
  • The important role of capital income – Capital income in Austria is highly concentrated and reacted strongly to changes in the economic cycle. Thus, they are a relevant driver both for the level and development of inequality.
  • Strong redistributive effects – The majority of the Austrian population – more than 2/3 of the total population – benefited from redistribution in Austria.

 

Figure – Income Inequality in Austria

This figure shows the pre-tax vs. post-tax national income redistribution in Austria.

Policy Recommendations

It is important to provide a comprehensive picture of the income distribution for policymakers. Distributional national accounts allow us to analyze the income distribution from many perspectives. The results of the study show strong redistributive effects by the Austrian welfare state. In this respect, fiscal retrenchments would result in considerably negative effects for lower-income groups.

Contacts

Authors

  • Stefan Jestl (The Vienna Institute for International Economic Studies – WIIW; Vienna University of Economics and Business): jestl@wiiw.ac.at
  • Emanuel List (The Macroeconomic Policy Institute – IMK; Research Institute for Economics of Inequality – INEQ, Vienna University of Economics and Business): emanuel.list@wu.ac.at

 

Media inquiries

 

Acknowledgments

The authors gratefully acknowledge funding from the Chamber of Labour Vienna.

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