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Nordic Economic Policy Review 2018

Increasing Income Inequality in the Nordics

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The contributions document how income inequality in the Nordics in various dimensions have increased over recent decades. These developments are put in an international context. Developments in Denmark, Finland, Norway and Sweden are compared. Important aspects analysed in detail are overall inequality of both market and disposable incomes, the redistribution through the tax and transfer system as well as through the provision of government welfare services, the importance of demographic factors, the developments of both relative poverty and top income shares, and gender inequality.

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Introduction

In recent years income distribution issues have received increased attention in most economically advanced countries both in the public debate and in academic circles. This reflects an international trend towards increased income inequality, a trend which has also affected the Nordic countries long associated with far-reaching egalitarian ambitions. As the inequality increases in the Nordics have been among the largest in the OECD area over the past decades, developments here have received particular attention internationally (see, e.g., OECD 2011, OECD 2015 and Morelli et al. 2015). This, in turn, has led to an on-going debate between those who see the rising income disparities as a threat to the Nordic welfare model and those who emphasise that inequality has increased from historically low levels and that the Nordics still remain among the countries with the most even income distribution.

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