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

40 The Distribution of Income in Irelandsamples for each of the years for which these are available. TheHBS was carried out in 1973 and 1980, and although the microdatafrom these surveys are not available for analysis some figureshave been produced by the CSO, published in Murphy(1984, 1985) and Rottman and Reidy (1988). Table 4.5 shows thedecile shares in disposable income among households from theHBS for 1973, 1980, 1987 and 1994/95. It also shows Gini andTheil summary measures computed from these decile shares:while these will understate the extent of inequality at each pointin time (because inequality within each decile is ignored) theyshould capture trends over time adequately.Table 4.5: Decile Shares in Disposable Income among IrishHouseholds, 1973, 1980, 1987 and 1994/95 HBSDecileBottom234S6789TopAllGiniTheil79731.73.35.06.57.89.210.913.016.226.4100.00.3670.221Share in Total Disposable Income (%)19801.73.55.16.67.99.311.013.016.225.7100.00.3600.21119872.23.75.06.37.69.211.013.416.625.0100.00.3520.2001994-952.13.54.86.07.69.211.313.616.725.1100.00.3620.210Source: Decile shares for 1973 and 1980 from Rottman and Reidy (1988), Table7.4, for 1987 and 1994/95 from microdata tapes (with correction for topcoding).Looking first at 1973 to 1980, we see that the share of the bottomdecile was unchanged but those of deciles 2-7 all rose slightly,with the top decile seeing a substantial decline in share. This isreflected in the fall in the Gini and Theil coefficients, also shownTrends in Income Distribution since 1973 41in the table. Between 1980 and 1987, the share of the bottomquintile rose substantially and that of the top decile again fell.Deciles 3-6 now experience a decline in share, however, withdeciles 8 and 9 seeing an increase. The Gini and Theil coefficientsshow a further decline in inequality between 1980 and1987. Over the whole period 1973-87, then, the HBS shows inequalityin the distribution of disposable household income falling,and the Gini coefficient falling from 0.37 to 0.35. This reflectsthe fact that the share of the top decile was down by 1.4per cent of total income and that of the bottom quintile up by0.9 per cent. It is worth noting that the other gainers were not inthe bottom half of the distribution, but rather deciles 8 and 9. 2This pattern contrasts with the increase in inequality observedfor gross income, over both sub-periods and 1973-87 asa whole. The redistributive impact of income tax and employees'social insurance contributions on the gross income distributiontherefore increased substantially over the period, asseen in the growing gap between the summary inequalitymeasures for gross and disposable income. In 1973 the Ginicoefficient for disposable income was 97 per cent of that forgross income, in 1980 it had fallen to 94 per cent, and by 1987 itwas only 88 per cent, while the corresponding percentages forthe Theil measure were 93 per cent in 1973, 87 per cent in 1980and 77 per cent in 1987. 3We saw in the previous section that the decline in inequalityin the distribution of disposable income between 1973 and 1987was not sustained after 1987. It would be desirable to look attrends during the earlier period having adjusted household incomesfor differences in size and composition, in other words toanalyse the distribution of equivalent household incomes.Without micro-data for 1973 and 1980, however, we have todraw on published results for those years. Roche (1984) presentedequivalent gross and disposable income distributions2 In terms of Lorenz curves, 1980 and 1987 both Lorenz-dominate 1973. TheLorertz curve for 1987 lies inside that for 1980 at most points, but those curvescross and there is no unambiguous dominance.3 Murphy (1984) and Rottman and Reidy (1988) note that between 1973 and1980 inequality rose even more for market income — that is, income beforecash transfers — but transfers offset some of this increase.