Top incomes and inequality in the UK: reconciling estimates from household survey and tax return data
R Burkhauser, N Herault, S JENKINS, R Wilkins
Oxford Economic Papers | Oxford University Press | Published : 2018
We provide the first systematic comparison of UK inequality estimates derived from tax data (World Wealth and Income Database) and household survey data (the Households Below Average Income [HBAI] subfile of the Family Resources Survey). We document by how much existing survey data underestimate top income shares relative to tax data. Exploiting the flexibility that access to unit-record survey data provides, we then derive new top-income-adjusted data. These data enable us to: better track tax-data-estimated top income shares; change the definitions of income, income-sharing unit, and unit of analysis used and thereby undertake more comparable cross-national comparisons (we provide a UK-US ..View full abstract
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Awarded by Australian Research Council
Awarded by UK Economic and Social Research Council
This work was supported by an Australian Research Council Discovery Grant (number DP150102409), and core funding of the Research Centre on Micro-Social Change at the Institute for Social and Economic Research by the University of Essex and the UK Economic and Social Research Council (grant number ES/L009153). For helpful discussions and perceptive comments on an earlier version, we thank Facundo Alvaredo, Tony Atkinson, and Peter Matejic (DWP), three referees, and audiences at the IARIW 2016 conference, Nuffield College, York, Alicante, and Clermont Ferrand.