Discussion Paper Details

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Title: The Inequality (or the Growth) we Measure: Data Gaps and the Distribution of Incomes

Author(s): Facundo Alvaredo, Mauricio De Rosa, Ignacio Flores Beale and Marc Morgan

Publication Date: March 2022

Keyword(s): Administrative data, data gaps, income distribution, Latin America, National Accounts and Surveys

Programme Area(s): Public Economics

Abstract: Large gaps exist between income estimates from inequality studies and macroeconomic statistics, questioning our representation of flows and the relevance of economic growth. We take stock of these gaps by confronting multiple datasets in Latin America, finding that surveys account for around half of macroeconomic income over the past twenty years. Less than half of this gap is due to conceptual differences, the remainder coming from growing measurement issues, which mainly concern capital incomes. Top tails in administrative data and surveys present diverging averages, especially for non-wage incomes, and different shapes. We discuss implications for both inequality levels and trends.

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Bibliographic Reference

Alvaredo, F, De Rosa, M, Flores Beale, I and Morgan, M. 2022. 'The Inequality (or the Growth) we Measure: Data Gaps and the Distribution of Incomes'. London, Centre for Economic Policy Research.