Income Distribution and Poverty in Selected OECD Countries

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Abstract
This study examines developments in the distribution of disposable income and poverty for 13 OECD countries over the past one to two decades. It finds that income inequality and poverty have increased in about half of the countries. However, the widening in the distribution of market income has been more pronounced and more widespread across countries, reflecting both earnings, capital and self-employment incomes. While widening wage rates have played a role in explaining earnings developments, the increasing share of households with no workers has also been important. The tax and transfer system has contained or, at least, partly offset the widening in the distribution of market income. Transfer payments have been particularly important at the bottom of the income distribution as they increasingly replaced lost earnings. Households of retirement age appear to have benefited, on average, the most net taxes and transfers.

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