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Income inequality among European households and their biological type

Małgorzata Grzywińska-Rąpca
Małgorzata Grzywińska-Rąpca
, 
Mariola Grzybowska-Brzezińska
Mariola Grzybowska-Brzezińska
 and 
Mirosław Gornowicz
Mirosław Gornowicz
   | Sep 30, 2023
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Article Category: Empirical Paper
Published Online: Sep 30, 2023
Page range: 197 - 208
Received: Dec 13, 2022
Accepted: Jan 21, 2023
DOI: https://doi.org/10.2478/ijme-2023-0005
Keywords
© 2023 Małgorzata Grzywińska-Rąpca et al., published by Sciendo
This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

Figure 1.

Changes in the value of the Gini coefficient in 2011 and 2020. A – Increasing inequalities; B – decreasing inequalities. Source: own elaboration.
Changes in the value of the Gini coefficient in 2011 and 2020. A – Increasing inequalities; B – decreasing inequalities. Source: own elaboration.

Figure 2.

Average values of median – real income by biological household type (2011 and 2020). Source: own elaboration. A – Single person, B – Single person with dependent children, C – Two adults, D – Two adults younger than 65 years, E – Two adults, at least one aged 65 years or over, F – Two adults with one dependent child, G – Two adults with two dependent children, H – Two adults with three or more dependent children, I – Two or more adults without dependent children, J – Two or more adults with dependent children, K – Three or more adults, L – Three or more adults with dependent children, Ł – Households without dependent, M – Households with dependent children.
Average values of median – real income by biological household type (2011 and 2020). Source: own elaboration. A – Single person, B – Single person with dependent children, C – Two adults, D – Two adults younger than 65 years, E – Two adults, at least one aged 65 years or over, F – Two adults with one dependent child, G – Two adults with two dependent children, H – Two adults with three or more dependent children, I – Two or more adults without dependent children, J – Two or more adults with dependent children, K – Three or more adults, L – Three or more adults with dependent children, Ł – Households without dependent, M – Households with dependent children.

Inequality indices per household type (2011 and 2020)

Label Gini Atkinson (epsilon = 1) Theil-T GE (alpha = 1) Theil-L GE (alpha = 0) Gini Atkinson (epsilon = 1) Theil-T GE (alpha = 1) Theil-L E (alpha = 0)
2011 2020
Households with dependent children 0.37 0.24 0.23 0.27 0.32 0.17 0.16 0.19
Households without dependent children 0.26 0.12 0.11 0.12 0.34 0.18 0.18 0.20
Single person 0.39 0.26 0.25 0.30 0.36 0.21 0.21 0.24
Single person with dependent children 0.37 0.24 0.23 0.27 0.32 0.16 0.16 0.18
Three or more adults 0.38 0.25 0.24 0.28 0.33 0.17 0.17 0.19
Three or more adults with dependent children 0.38 0.24 0.23 0.28 0.32 0.17 0.17 0.19
Two adults 0.39 0.26 0.25 0.30 0.35 0.20 0.20 0.22
Two adults, at least one aged 65 years or over 0.27 0.12 0.11 0.12 0.36 0.21 0.21 0.23
Two adults with one dependent child 0.38 0.25 0.23 0.28 0.32 0.17 0.17 0.18
Two adults with three or more dependent children 0.38 0.24 0.24 0.28 0.34 0.20 0.19 0.23
Two adults with two dependent children 0.39 0.28 0.25 0.33 0.32 0.17 0.16 0.19
Two adults younger than 65 years 0.39 0.26 0.25 0.30 0.34 0.19 0.19 0.21
Two or more adults with dependent children 0.37 0.24 0.23 0.27 0.33 0.17 0.17 0.19
Two or more adults without dependent children 0.37 0.24 0.23 0.28 0.34 0.19 0.19 0.20

Selected theories of income inequality

Author Description
Positive theories of income inequality
Smith (1776) Functional distribution of income between the main factors of production: labor, land, and capital. Personal income distribution was not considered.
Walras (1874) Presumption of a relationship between the prices of consumer goods, the prices of production factors, and the distribution of income and wealth.
Marshall (1890) Income distribution depends on the structuring of the production factor market, with particular emphasis on the price of the wage factor.
Pareto (1909) All statistical distributions of income follow the same pattern, which depends on the economic circumstances only to a minor degree
Dalton (1920) Consumers are endowed with some initial resources as well as shares in the profits of enterprises; therefore, prices shape the distribution of income.
Schultz (1916), Becker (1962, 1964) The marginal productivity theory of income distribution does not account for the varying productivity of production factors.
Kuznetz (1955) Trends in income inequality while allowing for changes in the agricultural and modern sectors (higher inequality).
Persson, Guido (1994), Barro (1999), Galor (2000), Galor, Moav (2004) Income inequality as a category incorporated into models explaining the development of other economic phenomena, e.g., economic growth.
Normative theories of income inequality
Smith (1776) Each individual satisfies their own needs and derives benefits from their own labor.
Malthus (1803) Helping disadvantaged individuals in society should not improve their standing in that society in the long run.
Ricardo (1817) Choices must be made between helping individuals (equity) and economic efficiency (allocating resources so that a higher dividend is achieved).
Marshall (1890) Excessive income inequality is seen as a flaw in the economic system, and its elimination is an obvious need, provided that such actions do not cause an economic downturn.
Sen (1983, 1990, 1997) Wealth is an instrument to satisfy needs, not a good.
Crocker (1992) Income and wealth are equated with individual welfare.

Descriptive statistics determined for the real median income of households by their biological type (2011 and 2020)

Specific features Minimum Maximum Average SD Asymmetrycoefficient Kurtosis
2011
Single person 1,656.69 31,102.87 11,865.08 8,626.16 0.83 0.01
Single person with dependent children 1,351.77 28,278.54 10,510.88 7,194.32 0.75 −0.08
Two adults 2,448.26 41,422.42 15,796.75 11,458.09 0.76 −0.30
Two adults younger than 65 years 2,576.37 46,059.34 18,053.12 12,918.93 0.73 −0.30
Two adults, at least one aged 65 years or over 3,947.92 28,044.49 12,721.58 6,190.39 0.55 −0.24
Two adults with one dependent child 1,746.47 37,852.44 14,831.13 10,115.80 0.56 −0.67
Two adults with two dependent children 1,143.59 32,651.93 12,062.19 8,560.13 0.58 −0.47
Two adults with three or more dependent children 2,521.73 41,783.66 16,313.45 11,376.58 0.71 −0.34
Two or more adults without dependent children 1,768.13 37,001.64 14,439.07 9,827.25 0.58 −0.58
Two or more adults with dependent children 2,698.83 44,450.53 17,348.74 11,846.04 0.66 −0.39
Three or more adults 1,761.54 38,387.39 14,153.74 9,884.33 0.72 −0.23
Three or more adults with dependent children 2,321.09 37,066.90 14,967.05 10,321.80 0.70 −0.27
Households without dependent children 4,044.01 28,631.92 14,168.54 6,630.58 0.25 −0.77
Households with dependent children 1,741.76 35,741.24 14,022.70 9,478.56 0.59 −0.53
2020
Single person 2,878.04 39,219.26 14,792.97 10,085.63 0.96 0.46
Single person with dependent children 3,344.27 33,020.06 13,406.16 7,834.29 0.71 −0.19
Two adults 4,644.66 50,014.94 20,133.46 13,266.19 0.84 −0.12
Two adults younger than 65 years 5,428.21 59,721.98 23,050.07 14,655.37 0.79 −0.08
Two adults, at least one aged 65 years or over 3,799.85 48,849.00 17,581.58 11,936.95 1.02 0.55
Two adults with one dependent child 5,430.05 46,529.28 20,483.28 12,048.63 0.62 −0.61
Two adults with two dependent children 4,228.46 41,423.88 19,226.05 11,204.71 0.53 −0.83
Two adults with three or more dependent children 2,244.74 35,085.86 15,201.32 9,410.65 0.54 −0.72
Two or more adults without dependent children 4,923.10 50,024.02 20,596.13 12,985.93 0.79 −0.22
Two or more adults with dependent children 3,997.88 40,661.14 18,524.73 10,936.62 0.55 −0.75
Three or more adults 5,443.84 50,333.47 21,790.62 13,060.10 0.64 −0.53
Three or more adults with dependent children 3,680.36 38,804.69 17,796.42 10,346.80 0.47 −0.95
Households without dependent children 4,402.36 46,697.62 18,720.43 11,743.30 0.83 −0.01
Households with dependent children 3,953.92 39,740.40 17,932.39 10,464.23 0.56 −0.71

Inequality rates – indices per country (2011 and 2020)

Label Gini Atkinson (epsilon = 1) Theil-T GE (alpha = 1) Theil-L GE (alpha = 0) Gini Atkinson (epsilon = 1) Theil-T E (alpha = 1) Theil-L GE (alpha = 0)
2011 2020
Austria 0.07 0.01 0.01 0.01 0.08 0.01 0.01 0.01
Belgium 0.09 0.01 0.01 0.01 0.09 0.01 0.01 0.01
Bulgaria 0.18 0.06 0.06 0.06 0.13 0.03 0.03 0.03
Croatia 0.09 0.01 0.01 0.01 0.09 0.01 0.01 0.01
Cyprus 0.07 0.01 0.01 0.01 0.06 0.01 0.01 0.01
Czechia 0.10 0.02 0.01 0.02 0.09 0.01 0.01 0.01
Denmark 0.12 0.02 0.02 0.02 0.07 0.01 0.01 0.01
Estonia 0.08 0.01 0.01 0.01 0.10 0.02 0.02 0.02
Finland 0.09 0.01 0.01 0.01 0.08 0.01 0.01 0.01
France 0.07 0.01 0.01 0.01 0.08 0.01 0.01 0.01
Germany 0.08 0.01 0.01 0.01 0.08 0.01 0.01 0.01
Greece 0.07 0.01 0.01 0.01 0.07 0.01 0.01 0.01
Hungary 0.13 0.03 0.03 0.03 0.08 0.01 0.01 0.01
Ireland 0.10 0.02 0.02 0.02 0.10 0.02 0.02 0.02
Latvia 0.10 0.02 0.02 0.02 0.10 0.02 0.02 0.02
Lithuania 0.13 0.03 0.03 0.03 0.11 0.02 0.02 0.02
Luxembourg 0.09 0.01 0.01 0.01 0.10 0.02 0.02 0.02
Malta 0.13 0.03 0.03 0.03 0.10 0.02 0.02 0.02
Netherlands 0.09 0.01 0.01 0.01 0.08 0.01 0.01 0.01
Norway 0.11 0.02 0.02 0.02 0.09 0.01 0.01 0.01
Poland 0.14 0.03 0.03 0.03 0.07 0.01 0.01 0.01
Portugal 0.09 0.01 0.01 0.01 0.06 0.01 0.01 0.01
Romania 0.20 0.06 0.06 0.06 0.12 0.02 0.02 0.02
Slovakia 0.11 0.02 0.02 0.02 0.09 0.01 0.01 0.01
Slovenia 0.07 0.01 0.01 0.01 0.07 0.01 0.01 0.01
Spain 0.09 0.01 0.01 0.01 0.09 0.01 0.01 0.01
Sweden 0.10 0.02 0.01 0.02 0.09 0.01 0.01 0.01

Changes in inequality by biological type of households

Label Theil-L vs Theil-T Inequality changes
Households with dependent children Theil-T decrease < Theil-L decrease Inequality decrease among lowest-income population
Households without dependent children Theil-L increase >Theil-T increase Inequality increase among lowest-income population
Single person Theil-T decrease < Theil-L decrease Inequality decrease among lowest-income population
Single person with dependent children Theil-T decrease < Theil-L decrease Inequality decrease among lowest-income population
Three or more adults Theil-T decrease < Theil-L decrease Inequality decrease among lowest-income population
Three or more adults with dependent children Theil-T decrease < Theil-L decrease Inequality decrease among lowest-income population
Two adults Theil-T decrease < Theil-L decrease Inequality decrease among lowest-income population
Two adults, at least one aged 65 years or over Theil-L increase >Theil-T increase Inequality increase among lowest-income population
Two adults with one dependent child Theil-T decrease < Theil-L decrease Inequality decrease among lowest-income population
Two adults with three or more dependent children Theil-T decrease = Theil-L decrease No change
Two adults with two dependent children Theil-T decrease < Theil-L decrease Inequality decrease among lowest-income population
Two adults younger than 65 years Theil-T decrease < Theil-L decrease Inequality decrease among lowest-income population
Two or more adults with dependent children Theil-T decrease < Theil-L decrease Inequality decrease among lowest-income population
Two or more adults without dependent children Theil-T decrease < Theil-L decrease Inequality decrease among lowest-income population
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