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.



Income Inequality in the Nordics from an OECD Perspective

We provide an overview of inequality developments in the Nordics compared to other OECD countries, starting from the early 1990s. Some of the largest inequality increases in the OECD have taken place in Sweden, Finland and Denmark, but from very low initial levels. A coherent set of institutions underpin high employment and have likely dampened the inequality-increasing forces from skill-biased technological change and globalisation. Demographic trends have increased inequality in the Nordics, but the main mechanisms vary between countries. Redistribution has weakened considerably, mainly driven by weaker insurance transfers to working-age individuals, but these reforms have contributed to including more people in the labour market.


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