Agenda item 13

Expert Group on Disparities in National Accounts

Meeting of the Advisory Expert Group (AEG) on National Accounts

Luxembourg, 29-31 May 2013

Maryse Fesseau, OECDPeter van de Ven, OECD

Introduction

• Background• Main results• Limitations• Recommendations• Way forward

Background

• How to arrive at economic growth without people dropping out-> need for information on how income, consumption and wealth are

distributed across households

• Main issues:– Existing distributional information from micro

sources:• Often focus on one dimension• In most cases no consistent time series• Not following international standards, especially related to

wealth

– National accounts data on households hardly provide any distributional information

Background

• Early 2011: OECD-Eurostat Expert Group (EG)• Mandate: study feasibility to arrive at an internationally

comparable methodology for generating distributional information consistent with national accounts

• Members: 25 countries, ECB, Luxembourg Income Studies

• Organisation of the work:– Phase 1 (2011): comparison between micro and macro

data sources on households’ income, consumption and wealth => to better understand similarities and divergences between both data sources

– Phase 2 (2012): allocation of national account totals to groups of households using a range of micro sources; derivation of disparity measures on income, consumption and saving, for a given year

Background

• Organisation of the work (followed):– National estimates following an agreed template and methodology;– Eurostat « a-minima exercise » for EU27.

• Release of the EG DNA results:– Papers presented at the IARIW and CRIW conferences (August 2012)– Publications at national level - already/about to be released in 12

countries– Publications at international level – 2 Working Papers by end of June:

• Comparison between micro and macro sources on household income (20 countries), consumption (21 countries) and wealth (7 countries) , usually for 2008 or 2009

• Experimental results for household adjusted disposable income, actual consumption and saving, fully/partially computed by 16 countries, broken down by income quintile, main source of income and household type

Main results

• Sharing knowledge across countries and between micro and macro experts

• Better understanding of NA concepts and compilation procedures, household micro data collection, and differences between both of them

• Compilation of experimental disparity measures across households groups consistent with NA estimates: – for a range of OECD countries – based on common templates and methodology

Illustrations of results according to income quintiles (note: results still to be checked for some countries)

Main resultsRelative position of each household group: Adjusted disposable

income per consumption units compared to the average, b y income quintile

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

Q1 Q2 Q3 Q4 Q5

France 2003

Italy 2008

Korea 2009

Mexico 2010

Netherlands 2008

New Zealand 2006-07

Slovenia 2008

United States 2010

Main results

Relative position of each household group: Actual final consumption per consumption unit compared to the average, by

income quintile

0.0

0.5

1.0

1.5

2.0

2.5

Q1 Q2 Q3 Q4 Q5

France 2003

Korea 2009

Mexico 2010

Netherlands 2008

New Zealand 2006-07

Slovenia 2008

United States 2010

Main results

Savings* as a percentage of adjusted disposable income, by income quintile

•Difference between adjusted disposable income and actual final consumption plus the change in net equity of households in pension funds.

Main resultsRatio of richest to poorest (Q5/Q1): comparison between the EG

results and the OECD micro database (IDD)

0

5

10

15

20

25

30

OECD Income Distribution Database (micro)

EG - Adjusted Disposable Income (ADI) per CU

EG - ADI per CU excluding NA concepts (among which STiK)

The legend indicates the extent to which the IDD and the EG results are comparable. A star indicates similar micro sources. A year is indicated in case IDD and EG relate to the same year.Note: micro measures are based on a grouping by individuals, whereas the EG is based on households.

Limitations

• No detailed recommendations on how to improve current micro and macro compilation processes in order to decrease discrepancies

• Results on disparity measures are still experimental:– Improvement of data sources needed– Some assumptions to align micro and macro may need

further research (STiK at individual level, property income, etc.)

– No conclusion on the robustness of the methodology over time– No disparity measures for wealth

Main recommendations

• Macro– Improve traceability of compilation procedures of national

accounts data for households– Compile household accounts at a more detailed level (exclude

NPISHs, more detail for some income components)

• Micro– Improve consistency between micro sources on income and

those on consumption and/or wealth– Compile socio-demographic reference series (e.g. number of

households)

• Macro + Micro– Encourage comparison of micro and macro estimates at the

national level on a regular basis

Way forward• In addition to the necessary refinement of the work done, two

options considered : i) compile time series; ii) extend the work to wealth.

• Survey (16 responses)– First priority in the near future: refinement (12 countries), time series (7), wealth

(3) – Answers to proposal for a possible follow-up of the EG:

• OECD proposal (to be discussed at the June meeting of CSTAT):– Maintain the Electronic Discussion Group to share publications and feedback– In the second half of 2013: Draft Terms of Reference for a new EG (goal and time

schedule to be refined on the basis of discussions at CSTAT and further discussions with delegates and experts)

Expert Group set up to: Yes To be considered No

Refine existing workIsrael, Italy, Korea, Mexico,

Netherlands, New Zealand, Portugal, Slovenia, United States

Australia, France, Germany, Japan, Sweden, Switzerland,

Turkey

Produce time seriesFrance, Israel, Mexico, Netherlands, New Zealand, Portugal, United States

Italy, Japan, Korea, Sweden, Switzerland

Germany

Expand the work on wealthFrance, Israel, Mexico, Netherlands,

United StatesAustralia, Italy, Japan, Korea,

PortugalGermany, New Zealand,

Sweden, Switzerland

Thank you for your attention