The Distribution of Income in Ireland (2000) - Combat Poverty Agency

2 The Distribution of Income in IrelandThe study is structured as follows. Chapter 2 describes thesurvey data on which the study relies and how income and itsdistribution are measured. Chapter 3 examines the distributionof household income in Ireland in the 1990s. Chapter 4 makesuse of data from earlier surveys to analyse how the distributionof income in Ireland changed between 1987 and 1994, and alsoto examine longer-term trends in the income distribution backto 1973. Chapter 5 focuses on how the level of inequality in thedistribution of household income in Ireland compares withother countries. Chapter 6 turns to the distribution of earnings,the most important source of income, and how this evolved inIreland over the decade from 1987. Chapter 7 then looks at therelationship between the earnings distribution and the overalldistribution of income among households, focusing in particularon the way in which the earnings of husbands and their wivesare related, and how that influences the household income distribution.Finally, Chapter 8 brings together the main findings.Chapter 2Measuring the Distribution ofIncome in IrelandBrian Nolan2.1 INTRODUCTIONBefore one can examine empirical evidence about the distributionof income, it is essential to have an understanding of theway incomes, their distribution, and the extent of inequality aremeasured. The aim of this chapter is to describe the data onwhich this study relies, and outline how income and its distributionare to be measured. Section 2.2 focuses on the descriptionof the household surveys to be employed and the informationthey obtain on income. Section 2.3 outlines methodologicalissues which arise in measuring the distribution of income andthe extent of income inequality, and the approaches to beadopted in this study.2.2 MEASURING THE DISTRIBUTION OF INCOME: DATA ANDPREVIOUS RESEARCHStudies of the distribution of income in Ireland rely on householdsurveys rather than administrative tax/social security recordsto provide the database. (See Nolan, 1978 for a discussionof the use of survey versus administrative data on income distributionin the Irish case, and Callan, 1991a, for a discussion ofsurvey and Revenue Commissioners income data). In this studywe rely on data from two sets of large-scale household surveys.The first comprises the survey carried out by the ESRI in 1987,