Gerlinde Verbist - The Drivers of Income Inequality in Belgium: 1985-2021

  • Presenting author: Gerlinde Verbist (University of Antwerp, Centre for Social Policy)

  • Authors: Ella-Marie Assal, Koen Decancq, Sarah Kuypers, Gerlinde Verbist

  • Session: C01A - Dynamic / Long term [2] - Wednesday 9:00-10:30 - Ceremonial Hall

Remarkably, income inequality in Belgium seems to have remained stable since the 1980’s. This contrasts with findings for most other OECD countries (where income inequality has been on the rise) and with the public perception. What makes the Belgian case different? Using a harmonized micro dataset for the period 1985-2021, we employ a decomposition technique to quantify the role of four main determinants behind income inequality: the tax-benefit system, the labor market structure, price returns and the demographic composition. The decomposition method is based on counterfactual distributions that are created using micro-econometric models, microsimulation modelling and semi-parametric reweighting. Among others, we aim to answer the following questions: Was the tax-benefit system able to counteract rising market income inequalities? What has been the effect of major demographic trends, such as an aging population? How has the increased labor market participation of women contributed to overall inequality levels?