TR 256_Top Income Shares in Greece

7/31/2019 TR 256_Top Income Shares in Greece

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Top Income Shares in Greece: 1957-2009

K. Chrissis, A. Livada, P. Tsakloglou

Athens University of Economics and Business

Technical Report No 256

ATHENS UNIVERSITY OF ECONOMICS AND BUSINESS

DEPARTMENT OF STATISTICS

2011


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Abstract

The main objective of this discussion paper is the estimation of top income shares in

Greece for the period 1957-2009. The compilation procedure is according to the

Piketty (2001) approach for 1%, 0,5% and 0,1% top income shares. To the best of our

knowledge, this is the first attempt for the implementation of the Piketty approach in

Greek tabulated tax data. A comparison of the findings with results from other

countries is presented.


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Top Income Shares in Greece: 1957-2009

1. Introduction

Current literature on income distribution utilizes tax data in order to study top income

shares. Atkinson (2007) notes the revival of interest in the study of the distribution of

top incomes using income tax data. Saez and Veall (2007) argue that the only source

of income distribution of upper income groups for an extended period of time is tax

data. In the same context Atkinson and Leigh (2007) note that income taxation

statistics provide a quantitative basis for measuring the trends whereas Feenberg and

Poterba (2000) state that tax returns are the most reliable source of information on the

incomes of high-income households. Dell (2007) and Atkinson (2005) argue that there

are specific limitations of the household surveys and their estimations for top end ofincome distribution. Finally, Piketty (2007) notes that the only data source that is

consistently available on the long-run basis is tax data.

In the present paper, the estimations of 1%, 0,5% and 0,1% upper shares of income

distribution will be compiled for the period 1957-2009. The structure of the study is

the following: Chapter 2 describes the data sources and the methodology used; the

results are illustrated in Chapter 3 whereas in Chapter 4 an international comparison is

presented. Finally Chapter 5 describes the main conclusions and the Annex contains

technical details of the previous chapters.

2. Data and Methodology

This chapter describes the data sources and the methodology used for the estimation

of Top Income Shares. The interested reader could see the Annex for more technical

and analytical reference of data sources and description of the techniques.

2.1 Data

Tax data provide detailed information on nominal family income and its sources, asreported annually in tax declaration forms. Family income is the sum of income

received by the husband and/or wife. This definition also includes single persons.

These data are compiled by the Tax Authorities and have been published annually by

the National Statistical Service of Greece (NSGG, now ELSTAT) since 1958. From

2003 onwards the publication is conducted by General Secretariat of Informatics

Systems of Ministry of Finance.


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Total family income is the sum of one or more of the following components1

a) Income from employmentb) Income from buildings and lease of landc) Income from securitiesd)

Income from commercial and industrial enterprisese) Income from agricultural enterprises

f) Income from self-employmentg) Income from abroad

The tax declarations are submitted in the following year of the year of reference. The

term economic year t refers to income that was acquired in the previous year. Thus,

economic year 2010 refers to the calendar year 2009. Tax data are reported in

tabulated form (grouped tax data). During the whole period the number of classes has

changed, being more analytical in the latter years.

2.2 Methodology

There are certain methodological problems addressed to the estimation of the top

income shares when grouped tax data are utilized. The first problem is that the

thresholds of income shares do not coincide with the percentiles, so interpolation

estimation is required. The second issue is the need to relate the number of persons to

a control total in order to estimate the percentage of units that represents the top

income share. The third problem refers to the definition of income and the relation to

an income control total used as the denominator in the top income share estimation.These issues are presented in the following sections, where the interpolation

technique, the control total for population and control total for income are described.

2.2.1 Interpolation

The issue with the tabulated tax data is that the thresholds of income classes do not

coincide with the percentiles which are necessary for the estimation of top income

shares. The standard approach to tackle this issue is the utilization of the Pareto

distribution that is assuming the top end of income distribution is well described by

the Pareto distribution. Specifically, Vilfredo Pareto (1896, 1896-97) noticed that top

incomes fit remarkably well under the assumption of Pareto distribution using tax

tabulations from Swiss cantons. The first economist to use these data and

methodology in a systematic way was Kuznets (1953); the empirical findings resulted

in the famous Kuznets curve theory (1955) according to which income inequality

should follow an inverse U-shape along the development process, first rising with

1

Category (b) is the merging of two categories after 1984 (economic year 1985): Income frombuildings and Income from lease of land excluding buildings. Also category (d) is divided in two sub-

categories for the years 1976-1998 according to the type of the enterprise.


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industrialization and then declining, as more and more workers join the high

productivity sectors of the economy.

Pareto extrapolation techniques have been used by several researchers such as

Feenberg and Poterba (1993), Piketty (2001, 2003, 2007), Piketty and Saez (2001,

2003, 2007), Saez and Veall (2007), Dell (2007), Dell, Piketty and Saez (2007),Nolan (2007), Banerjee and Piketty (2010), Piketty and Qian (2010), Alvaredo and

Saez (2010), Alvaredo (2010) and Alvaredo and Pisano (2010).

The Pareto distribution specifies that the probability that a randomly chosen

taxpayers income is described2

by:

1-F(y) = (k>0, a>1)

The two parameters are k, the minimum income that the Pareto distribution applies to

(k>0) and a, the exponent that determines the shape of the distribution.

The density f(y) of the distribution therefore has the form f(y) = /. If thedistribution of taxable income has this form, then the average income y * (y) of the

households whose income is greater than y is given by:

y*(y) = [ /[ = [ / ]/ [ /

] = ay/(a-1)

According to the Pareto law the ratio y * (y) /y is equal to a constant b = a/ (a-1), that

is the ratio of average income y * (y) of households (or tax units or individuals) with

income above y to y does not depend on the income threshold y.

It is noted that a higher b coefficient means a fatter upper tail of the income

distribution, which generally implies higher inequality (for a constant mean).

Certain interpolation techniques are described in Atkinson (2005, 2007). In this

chapter the Pikettty (2001) approach for Pareto procedure is used.

2.2.2 Control Total for Population.

Control total for population is needed since the amount of fillers of tax returns were

low especially in the beginning of the period under investigation. Additionally the

definition of the tax unit does not coincide with the individuals, since the tax unit is

defined as a married couple living together with dependent children (without

independent income) or as a single adult with dependent children. The control total

used is the population over the age of 20 minus half the number of the married men

and women. The data sources are the Concise Statistical Yearbooks and the Censuses

of Population. For the years that no data are available linear interpolation techniques

are applied. Certain variations of this specific control total for population have been2

For details see Piketty (2001, 2007) and Piketty and Saez (2007)


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applied by several researchers [Atkinson (2005), Piketty and Saez (2001, 2003),

Piketty (2001, 2003) and the studies included in the two volumes edited by Atkinson

and Piketty (2007, 2010)]

2.2.3 Control Total for Income.

To estimate shares in total income a control total for aggregate income is needed. Two

approaches are commonly applied. One approach starts from the income tax and adds

the income of those not covered (the so called non-fillers). The second approach

starts from an external control total, typically derived from the national accounts. This

is a standard approach employed by Kuznets (1953) and used by many researchers in

historical studies of income inequality [Piketty (2001, 2003), Piketty and Saez (2001,

2003) and the majority of the studies included in the two volumes edited by Atkinson

and Piketty (2007, 2010)].

There are certain differences in the definition and coverage of income in the national

accounts versus income tax statistics. Nevertheless, the national accounts figures are

correlated with income tax data, since the latter are one of the sources used in the

compilation procedure of national accounts. In order to produce series that are

comparable (to the best possible extent) with the declared tax income certain

transactions of the Households Sector were utilized. These transactions (from the

scope of received incomethat is Resources) are the Wages, Property Income, Social

Benefits (mainly pensions of all kinds; main and auxiliary) and Other Current

Transfers. Employers actual social contributions, employers imputed social

contributions and Subsidies are not included. The series used have been compiled byELSTAT for the years 1988-1995 (mixed system), 1995-2000 (ESA95), 2000-2008

(ESA95 base year 2000) and 2005-2009 (ESA 95 base year 2005). The Wages

illustrate gross income meaning that the employees social contributions are included.

These amounts are deducted from the Wages for the years 1988-2009. The net income

of self employed is not captured by the figures mentioned so far. From the National

Accounts point of view, this income is incorporated into the Gross Operational

Surplus (GOS) of Self-employed, which is relatively close to the concept of tax

income of self employed (declared income provided one has profits). These amounts

were incorporated for the years 1988-2009. This new sum of income is calculated as

a percentage of the GDP (Gross Value Added at market prices). For consistency

reasons this percentage was applied to the GDP series that has been compiled by theEurostat. The GDP figures of 1957, 1958 and 1959 are estimated using the (reverse)

growth rate of GDP compiled by ELSTAT and this rate was applied in 1960 GDP

compiled by Eurostat. Then the average percentage of the sum of income for the

years 1988-2009 was calculated and applied to the estimated GDP. Linear

interpolation was applied for the missing years and the final results of the control total

for income are presented in Annex Table 10. The underlying inconsistencies of the

series should be taken into consideration in the interpretation of the results.


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3. Implementation and results

3.1 Income thresholds and average income levels

The approach of Piketty (2001) of the Pareto law is applied in the tabulated tax datafor the period 1957-2009. The control total for population described in 2.2.2 is

illustrated in Annex Table 1 (column 12). The results for the first stages of the

implementation of Pareto law are presented in Annex Table 2, that is the income class

threshold of the tabulated tax data (), the proportion of tax units (the proportionrefers to the whole population - Annex Table 1 column 12) that declared income

higher than the income class threshold () and the ratio between the averageincome of these households and their minimum income (that is the inverted Pareto

coefficient b according to the Piketty approach which takes into account the

differences between the income classes) ().Seven income thresholds have been estimated for the whole period. The thresholds

are P953, P97,5, P98, P98,5, P99, P99,5 and P99,9 with the corresponding average

income levels P95-100, P97,5-100, P98-100, P98,5-100, P99-100, P99,5-100 and

P99,9-100.

The thresholds that are of most importance are those of 1% (P99), 0,5% (P99,5) and

0,1% (P99,9). Since not all values are directly compiled, an estimation procedure

based on linear interpolation is applied. The known variable is the total population.

Then the which is closer to the desirable threshold (P99, P99,5 and P99,) is chosen.In any case, the differences of the coefficients () are miniscule leading to similar

results of the average income levels. The last stage of the procedure is the calculationof the average income levels (P99-100, P99,5-100 and P99,9-100).

The results of the compilation procedure for the income thresholds (P99, P99,5 and

P99) and their corresponding average income levels (P99-100, P99,5-100 and P99,9-

100) are presented in Table 1. The values are in current prices and are expressed in

thousands euros (currency rate 1 euro=340,75 drachmas)

3Except for the years 1973 and 1974, where the estimated thresholds are 3,5% and 3% respectively

instead of 5%.


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Table 1Income thresholds and average income levels (current prices-000 euros)

P99 P99-100 P99,5 P99,5-100 P99,9 P99,9-100

1957 0,202481 0,401864 0,285927 0,56673 0,630897 1,269829

1958 0,225741 0,417619 0,31025 0,574325 0,6607493 1,199396

1959 0,224449 0,414903 0,302473 0,572397 0,6443144 1,225475

1960 0,264138 0,481268 0,367732 0,66159 0,7672779 1,34828

1961 0,277241 0,499988 0,385845 0,683592 0,7821949 1,3738041962 0,305019 0,543352 0,424249 0,737866 0,8656364 1,463136

1963 0,33651 0,607969 0,468057 0,823577 0,9558041 1,634436

1964 0,365695 0,609477 0,529459 0,917006 1,0744682 1,790739

1965 0,403501 0,700472 0,589368 1,023133 1,1774743 1,978871

1966 0,463491 0,801098 0,657922 1,137153 1,2995893 2,200786

1967 0,560878 0,960799 0,782719 1,282249 1,5043479 2,399556

1968 0,600343 1,007741 0,823674 1,341494 1,5595567 2,493735

1969 0,648795 1,091961 0,89503 1,452096 1,6869906 2,673616

1970 0,696836 1,160869 0,947929 1,541292 1,7908109 2,83885

1971 0,788473 1,277103 1,031351 1,670498 1,934037 3,064118

1972 0,92652 1,504578 1,13926 1,850047 2,1446901 3,384479

1973 1,023498 1,782493 1,350465 2,391464 2,6378808 4,843899

1974 1,159096 1,916524 1,47503 2,524894 2,8185482 4,975787

1975 1,334784 2,07103 1,703642 2,668991 3,0398366 4,791523

1976 1,585574 2,414315 1,989914 3,066835 3,5031262 5,388771

1977 1,870934 2,802189 2,331796 3,539938 3,9792213 6,157541

1978 2,246604 3,301808 2,775341 4,126432 4,7177912 7,022264

1979 2,705848 3,992515 3,272445 4,828538 5,4593129 8,345905

1980 3,071693 4,418841 3,757066 5,770567 6,1971249 9,515722

1981 4,092844 6,464842 4,203644 6,639855 7,0607356 12,05904

1982 4,80026 6,902456 5,167036 7,429856 8,2123637 12,34128

1983 5,471825 7,71817 6,051865 8,536333 9,4015588 14,35173

1984 6,050029 8,222851 6,723154 9,800479 10,522337 16,25559

1985 7,279632 10,72805 8,738036 12,87731 13,344562 23,21795

1986 8,332811 11,7707 10,17805 14,37724 16,08823 24,98483

1987 9,419216 13,10118 11,63597 17,93297 18,123659 27,93158

1988 10,60972 15,70669 13,22549 19,5791 22,223382 32,89962

1989 12,32755 17,9004 16,44972 23,88606 28,139045 40,85972

1990 14,65017 20,71398 19,98573 28,25796 36,137408 51,09494

1991 17,78176 25,24843 24,75334 35,14741 46,921641 66,62431

1992 21,49613 30,60814 30,40819 43,29792 59,712758 85,02443

1993 26,02771 36,92774 35,17456 49,90515 70,494174 100,0161

1994 30,17065 42,82404 39,53215 56,1117 80,350948 114,04971995 34,02291 48,35164 43,58401 61,9394 89,516154 127,2158

1996 37,56267 54,0658 47,30717 68,09154 97,937861 140,9668

1997 40,75309 59,57946 50,6629 74,22225 105,52843 154,6014

1998 45,10894 66,57407 56,41639 83,22724 112,1049 165,3807

1999 49,78231 75,98154 62,48177 95,36444 117,47804 179,3039

2000 52,97243 81,09724 66,91347 102,44 121,40394 185,8613

2001 55,94708 85,7147 71,04582 109,0513 125,06466 191,5868

2002 60,28768 92,53867 76,57327 117,9178 134,54148 207,9242

2003 63,53541 98,05058 81,07779 125,1214 142,88004 220,0216

2004 67,26338 101,9407 84,95476 129,1858 146,9479 225,606

2005 70,66306 108,0375 89,42418 137,482 154,82184 243,6717

2006 74,88499 114,4734 94,98204 145,5313 164,83162 255,9083

2007 80,54209 123,1338 101,9855 156,6462 177,87407 277,007

2008 84,08451 127,8249 105,9261 162,2337 184,06354 285,8095

2009 86,75819 129,129 108,9165 162,0823 184,66374 275,5626

Source: Authors calculations

Having estimated the total control for income as it was described in chapter 2.2.3, the

next step is to accrue the average income for the top incomes in the population that

belong to 1%, 0,5% and 0,1% (according to the control total of population). Table 2

presents the Top Income shares in current prices4

for the period 1957-2009.

4 Expressing the income thresholds, the average income and the control total for income

(denominator) in 2009 prices does not have a significant impact of the overall pattern of the three topincome shares in the period under examination.


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Table 2Top Income Shares 1%, 0,5%, 0,1% - current prices

1% SHARES 0,5% SHARES 0,1% SHARES

1957 7,4708% 5,2679% 2,3607%

1958 7,4531% 5,1249% 2,1405%

1959 7,1887% 4,9588% 2,1233%

1960 7,9216% 5,4448% 2,2192%

1961 7,2534% 4,9585% 1,9930%1962 7,5507% 5,1269% 2,0333%

1963 7,4971% 5,0779% 2,0155%

1964 6,6662% 5,0149% 1,9586%

1965 6,6757% 4,8754% 1,8859%

1966 6,8899% 4,8901% 1,8928%

1967 7,7446% 5,1678% 1,9342%

1968 7,4870% 4,9833% 1,8527%

1969 7,0731% 4,7029% 1,7318%

1970 6,6648% 4,4244% 1,6298%

1971 6,6330% 4,3381% 1,5914%

1972 6,9378% 4,2654% 1,5606%

1973 6,3263% 4,2438% 1,7192%

1974 5,9473% 3,9176% 1,5441%

1975 5,4032% 3,4816% 1,2501%

1976 5,1371% 3,2628% 1,1466%

1977 5,1528% 3,2547% 1,1323%

1978 5,0330% 3,1450% 1,0704%

1979 4,9612% 3,0001% 1,0371%

1980 4,6827% 3,0576% 1,0084%

1981 5,6806% 2,9172% 1,0596%

1982 5,0046% 2,6935% 0,8948%

1983 4,7508% 2,6272% 0,8834%

1984 4,1145% 2,4519% 0,8134%

1985 4,4545% 2,6735% 0,9641%

1986 4,1388% 2,5276% 0,8785%

1987 4,1381% 2,8321% 0,8822%

1988 4,1195% 2,5675% 0,8629%

1989 3,7564% 2,5063% 0,8574%

1990 3,6531% 2,4918% 0,9011%

1991 3,5930% 2,5008% 0,9481%

1992 3,9064% 2,7630% 1,0851%

1993 4,3196% 2,9188% 1,1699%

1994 4,2419% 2,7790% 1,1297%

1995 4,6457% 2,9756% 1,2223%

1996 4,8807% 3,0734% 1,2725%

1997 5,1445% 3,2044% 1,3349%

1998 5,3043% 3,3156% 1,3177%

1999 5,9062% 3,7064% 1,3938%

2000 6,1006% 3,8531% 1,3982%

2001 6,0806% 3,8681% 1,3591%

2002 6,5271% 4,1586% 1,4666%

2003 6,3959% 4,0809% 1,4352%

2004 6,2330% 3,9494% 1,3794%

2005 6,1460% 3,9105% 1,3862%

2006 5,9275% 3,7678% 1,3251%

2007 5,4641% 3,4756% 1,2292%

2008 5,6521% 3,5868% 1,2638%

2009 5,6515% 3,5469% 1,2060%

Source: Authors calculations

The top 1% share initiates from a value of 7,5% and ends up around 5,65%. The level

is relatively constant until the late sixties; after this period a slow but steady decline

emerges. This trend remains until the beginning of 1980; during this decade the top

1% is around 4%. In the beginning of the next decade the income share of the 1%

rises without nevertheless reaching the initial levels. This trend seems to be

interrupted in 2001-2002.

The pattern of the 0,5% top income share is similar. After a period of relative stability(around 5%) there is gradual decline that lasts until the early eighties. Then for a


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decade the level is around 3% and starts rising in the early nineties. After 2000 it

stabilizes in the level of approximately 4%, with a small, but steady, tendency to

decrease.

The behavior of the 0,1% top income share does not differ either. The level is around

2% for the period 1957-1970, it then decreases and reaches a level of 1% in the late70s and the early 80s. It starts rising from 1991-1992 reaching approximately 1,5%;

once again, after 2002 a small tendency for decline is detectable.

The Figure 1 illustrates the Top Income Shares for the period 1957-2009 at current

market values.

Figure 1

According to the previous analysis, the behavior of the three estimated top income

shares is quite similar5. According to Figure 1, a flat U-shaped pattern for all three

cases seems to exist. Nevertheless this pattern is more apparent for the 1% and 0,5%

top income share.

4. International experience

It has already been stated that there is revival of interest in the study of top incomes

using income tax data. Atkinson, Piketty and Saez (2007, 2010, and 2011) conduct a

comparison of Top Income Shares for several countries using the outcomes of

corresponding studies.

They state that even though the authors of these studies have modeled their research

according to Piketty (2001), there are certain parameters that the user of these results

should bear in mind. Certain differences in methodology are unlikely to affect the

5Expressing the three estimated top income shares in 2009 prices does not impose any significant

effect to their behavior.

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

8.00%

9.00%

1957

1958

1959

1960

1961

1962

1963

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1965

1966

1967

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1969

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1971

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1975

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1989

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1991

1992

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1995

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1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

TOP INCOME SHARES

1% SHARES 0,5% SHARES 0,1% SHARES


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broad conclusions whereas others are quantitatively more important. The former are

cases such as the choice of interpolation method or the choice of age cut-off for the

adult population. The latter cases are differences that refer to the unit of analysis, the

derivation of control totals for income and the dependence of the estimates on the

country specific features of the income tax legislation that determine the definition ofincome. These cross-country differences should be taken into account.

The focus is on three main empirical results. The first is that most countries

experienced a sharp drop in top income shares in the first half of the 20th

century.

They attributed this fall to the decline of the capital income component. Secondly, the

post war picture indicate, that top income shares yield a U-shape pattern with further

declines during the immediate postwar decades followed by increases in the recent

decades. Nevertheless the U pattern is quite different among the countries. In all

Western English-speaking countries (in Europe, North America, Australia and New

Zealand), in India and China the increase in top shares is significant, being more

intense in the United States. An increase in the latter decades is detectable in Southern

European (Italy, Spain and Portugal) and Nordic (Sweden, Finland and Norway)

countries, but the trend is less intense. Finally the Continental European (France,

Germany, Netherlands and Switcherland) countries and Japan experience a very flat

U-shape with either no or modest increases in top income shares in recent decades6.

The third result refers to the fact that the increase in top income shares is related

(among other things) to an increase in top labor incomes namely wages and salaries.

The next figures illustrate the pattern of the 1%, 0,5% and 0,1% top income shares of

Greece (current prices) and five other countries (Italy, Portugal, Spain, France andUSA) for the period 1957-2009. The period is chosen according to the estimated

values of the Greek case; values for more or less years exist for the other countries.

6

The characterization of certain countries such as France, Germany, Japan and other as L -shapedrefers to the whole period of examination and not only to the post war period. They also note that

these L-shaped countries tend to move towards to U-shaped pattern.


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Figure 2

The 1% top income share in Greece is in lower levels than the other countries. The

trend is similar to the Southern-European countries, most notably with Italy. It is

noted, though, that the behavior of France is similar, but the changes are less intense.

Figure 3

0.00

2.00

4.00

6.00

8.00

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18.00

20.00

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1% TOP SHARE

GREECE SPAIN PORTUGAL ITALY FRANCE USA

0.00

2.00

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6.00

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0,5 % TOP SHARE



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The 0,5% top income share is lower in Greece. The pattern is similar with the

Southern-European countries and France; Portugal, nevertheless, yields more intense

changes.

Figure 4

The general picture is not different with 0,1% top income share. There are similarities

with Spain, Italy and France. Once again the changes are more intense in Portugal.

It is noted that in all cases the USA pattern differs, with a significant increasing trend

emerging in the late eighties.

5. Conclusions

Current literature on income distribution utilizes tax data in order to study top income

shares. Estimations of 1%, 0,5% and 0,1% for the upper shares of income distribution

were compiled for the period 1957-2009 utilizing tabulated tax data. Tax data provide

detailed information on nominal family income and its sources, as reported annually

in tax declaration forms. The issue with the tabulated tax data is that the thresholds ofincome classes do not coincide with the percentiles which are necessary for the

estimation of top income shares; this issue was tacked with the utilization of the

Pareto distribution. Control total for population was applied since the amount of

fillers of tax returns were low especially in the beginning of the period under

investigation. Finally, the control total for income employed in this study was derived

from the national accounts.

The behavior of the three estimated top income shares is quite similar; a flat U-

shaped pattern for all three cases seems to exist. Nevertheless this pattern is more

apparent for the 1% and 0,5% top income share.

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

9.00

1957

1958

1959

1960

1961

1962

1963

1964

1965

1966

1967

1968

1969

1970

1971

1972

1973

1974

1975

1976

1977

1978

1979

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

0,1% TOP SHARE



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14

The top 1% share initiates from a value of 7,5% and ends up around 5,65%. The level

is relatively constant until the late sixties; after this period a slow but steady decline

emerges. This trend remains until the beginning of 1980; during this decade the top

1% is around 4%. In the beginning of the next decade the income share of the 1%

rises without nevertheless reaching the initial levels. This trend seems to beinterrupted in 2001-2002.

The pattern of the 0,5% top income share is similar. After a period of relative stability

(around 5%) there is gradual decline that lasts until the early eighties. Then for a

decade the level is around 3% and starts rising in the early nineties. After 2000 it

stabilizes in the level of approximately 4%, with a small, but steady, tendency to

decrease.

The behavior of the 0,1% top income share does not differ either. The level is around

2% for the period 1957-1970, it then decreases and reaches a level of 1% in the late

70s and the early 80s. It starts rising from 1991-1992 reaching approximately 1,5%;

once again, after 2002 a small tendency for decline is detectable.

Finally, the estimated top income shares of Greece were compared with the

corresponding ones of five other countries (Italy, Portugal, Spain, France and USA)

for the period 1957-2009. In all cases top income shares in Greece are in lower levels.

The trend of the 1% top income share is similar to the Southern-European countries,

most notably with Italy. It is noted, though, that the behavior of France is similar, but

the changes are less intense. The pattern of the 0,5% top income share is similar with

the Southern-European countries and France; Portugal, nevertheless, yields more

intense changes. The general picture is not different with 0,1% top income share.

There are similarities with Spain, Italy and France. Once again the changes are moreintense in Portugal. It is noted that in all cases the USA pattern differs, with a

significant increasing trend emerging in the late eighties.


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15

Bibliography

Atkinson, A. B., (2005), Top incomes in the UK over the 20 th century, Journal ofthe Royal Statistical Society. Series A (Statistics in Society), Vol. 168, No. 2, pp.

325-343

Atkinson, A. B., and Piketty, T. (ed) (2007), Top incomes over the twentieth century,Volume I, Oxford Press

Atkinson, A. B., and Piketty, T. (ed) (2010), Top incomes over the twentieth century,Volume II, Oxford Press

Atkinson, A. B., Piketty, T and Saez, E.,( 2011), Top Income Shares in the Long runof History, Journal of Economic Literature, 49:1, 3-71

Feenberg, D. and J. Poterba (1993), Income Inequality and the Incomes of VeryHigh Income Taxpayers: Evidence from Tax Returns , Tax Policy and the Economy

n7, pp.145-177

Feenberg, D. and J. Poterba (2000), The Income and Tax Share of Very HighIncome Households, 1960-1995 , American Economic Review, 90(2), 264-270

Feenberg, D. and J. Poterba (2000), The Income and Tax Share of Very HighIncome Households, 1960-1995 , NBER, Working Paper 7525 Kopzuck, W., and Saez, E., (2004), Top wealth shares in the United States, 1916-

2000: Evidence from estate tax returns [long version], NBER, Working paper 10399

Kopzuck, W., and Saez, E., (2004), Top wealth shares in the United States, 1916-2000: Evidence from estate tax returns [short version] National Tax Journal, 57(2),Part 2, 445-487

Kuznets, S. (1953), Shares of Upper Income Groups in Income and Savings,National Bureau of Economic Research

Piketty, T. (2001), Income inequality in France 1901-1998, [long version], NBER,discussion Paper 2876

Piketty, T. (2001), Les hauts revenus en France au 20me siecle . Ingalits etredistributions, 1901-1998, Editions Grasset

Piketty, T. (2003), Income inequality in France 1901-1998, [short version], Journalof Political Economy, vol 111, No. 5,

Piketty, T. (2005), Top income shares in the long run, Journal of the EuropeanEconomic Association 3(2-3):1-11

Piketty, T. and Saez, E., (2001), Income inequality in the United States 1913-1998[long version], NBER, Working Paper 8467

Piketty, T. and Saez, E., (2003), Income inequality in the United States 1913-1998[short version], Quarterly Journal of Economics, Vol 118, No. 1, pp. 1-39

Piketty, T. and Saez, E., (2006), The evolution of top incomes: a historical andinternational perspective , NBER, Working Paper 11955

Piketty, T. and Saez, E., (2006), The Evolution of Top Incomes: A Historical andInternational Perspective, The American Economic Review, Vol. 96, No. 2 , pp. 200-205 Published


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17

The number of the tax declarations has been constantly increasing. It started from

208.290 in the 1957 and it is 5.694.978 in 2009.

The level of the declared income has an increasing trend as well. The total declared

family tax income was 30.728.100 (in euros) in 1957 and 100.300.747.379 euro in

2009.

The average declared income has risen from 147,526 euro in 1957 to 17.612,140 euro

in 2009 (current market prices).

Another interesting aspect of the declared family income is the time series of the

income sources. The contribution of certain income sources varies significantlythrough the reference period. The following graph illustrates the percentage of the

contribution of income sources to the total level of income.

The contribution of salaries and wages have raised dramatically during the reference

period. From the level of 34,63% in 1757, it reaches 74,41% in 1984 following a

constant upward trend. It started to decline gradually in the next years and after 1998

(67,87%) it increases again, reaching the level of 76,62% in 2009.

The trend for the income of enterprises from commerce and industries has the

opposite direction. It has declined significantly and constantly (with small exceptions

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

1957

1959

1961

1963

1965

1967

1969

1971

1973

1975

1977

1979

1981

1983

1985

1987

1989

1991

1993

1995

1997

1999

2001

2003

2005

2007

2009

Figure 1 - Number of Tax Returns

0

20,000,000,000

40,000,000,000

60,000,000,000

80,000,000,000

100,000,000,000

120,000,000,000

1957

1959

1961

1963

1965

1967

1969

1971

1973

1975

1977

1979

1981

1983

1985

1987

1989

1991

1993

1995

1997

1999

2001

2003

2005

2007

2009

Figure 2 - Declared Income

0

5000

10000

15000

20000

1957

1959

1961

1963

1965

1967

1969

1971

1973

1975

1977

1979

1981

1983

1985

1987

1989

1991

1993

1995

1997

1999

2001

2003

2005

2007

2009

Figure 3 - Average Declared Income

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

80.00%

90.00%

1957

1959

1961

1963

1965

1967

1969

1971

1973

1975

1977

1979

1981

1983

1985

1987

1989

1991

1993

1995

1997

1999

2001

2003

2005

2007

2009

Figure 4 - % of Income Sources

buildings and lease of land

securities

commerce and industries

agricultural enterprises

salaries and wages

self employed

ROW


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18

in mid-70s and mid-90s). The contribution fell from 40,32% in 1958 at 8,19% in

2009.

The income from buildings and lease of land declined as well, reaching the lower

level at mid-80s, and after an increasing trend for the next period it is stable the last

years at the level of approximately 9%.Significant decrease of contribution has also the income from securities.

The income for self employed does not yield the same trend for the whole period.

The range of the share is from 2,53% to 5,95%. The same applies for agricultural

enterprises with the contributions, though, being in significantly lower levels: from

0,08% to 2,49%. Finally the income from the rest of world (coded 1992) is in very

low levels below 0,4% for all years).

3. Pareto Method of Interpolation

The Pareto interpolation technique used is described in Piketty (2001) and Piketty and

Saez (2007).

In order to estimate a given fractile threshold (P90, P95, . . . , P99.99), we choose the

income bracket threshold s such that the fraction p of tax units with income above s is

as close as possible to the given fractile; we note b the ratio between the average

income of all tax returns above s and s; we then compute a=b/(b-1) and k= ,which allows us to compute the given threshold income by using the Pareto formula

1-F(y) = (1)

(where F(y) is the cumulative distribution function). Top fractiles average incomes

(P90100, P95100,, P99.99100) are then obtained by multiplying the

corresponding fractile threshold by b (in practice, the result barely depends on the

interpolation threshold s , as long as s is not too far from the given fractile).

According to Pietty and Saez (2007) this interpolation technique is slightly different

from the one used by Feenberg and Poterba (1993) and delivers more precise results

(Feenberg and Poterba only use the slope between two consecutives thresholds s, and

do not use the information embodied in the b coefficients).

4. Control Total for Population

For the estimation of the population control total several data sources have been

utilized, being the main nevertheless the Concise Statistical Yearbook (CSY). Table 1

summarizes the data used for the estimation of the control total for each year. The

total population (column 2) includes estimations from ELSTAT [they coincide with

the figures of CSY 1971 (Table II.2: 1957-1970), CSY 2003 (Table II.4: 1971-2001)

and CSY 2009 (Table II.4: 2002-2008)] and it refers to the midpoint of each year (mid

year). Actual figures for population over 20 (column 4) and married people over

20 (column 5) exists for the years of census, that is 1971, 1981, 1991 and 2001 (CSY

1975-1976 Table II.5: 1971, CSY 1983-1984 Table I.6: 1981, CSY 1993 Table II.6:1991, CSY 2003 Table II.6: 2001). A small inconsistency occurs due to the fact that


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19

these (actual) figures do not refer to midpoint of the year. CSY provides estimates

(and not actual figures) for the midpoint for several years but only for the population

over 20 (and not for married over 20) (column 3); moreover no figure for 1971

(census year) is provided. Nevertheless the difference (for population over 20) is

very small for the years where comparison is available (1981, 1991, 2001).

A method of linear interpolation (see below technical description of linearinterpolation) is used for the missing values. For the missing values of population

over 20 linear interpolation is applied for the years 1961-1963, 1970-1974, 1983,

1986, 1988; the known variable for estimation is the total population (column 6). For

the missing values of married over 20 linear interpolation is applied for the years

1972-1980, 1982-1990, 1992-2000; the known variable for estimation is the total

population (column 7). Column 8 illustrates the results for population over 20 (CSY

estimates) minus married over 20 (linear interpolation estimates) divided by two.

Column 9 illustrates the results for population over 20 (linear interpolation

estimates) minus married over 20 (linear interpolation estimates) divided by two.

For the period 1957-1970 the annual (reverse) growth rate of total population is

applied on the figure of population over 20 minus married people over 20 divided bytwo on the actual figure of 1971 [that is the annual (reverse) growth rate is applied for

each year for 1971 backwards] . For the period 2002-2009 the same procedure is used

on the corresponding actual figure of 2001 (that is annual growth rate for each year

for 2001 onwards). The estimates for the periods 1957-1970 and 2002-2009 are

illustrated in the column 11. The control total for population is the column 12.


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21

the ratio between the average income of these households and their minimum income

(that is the Pareto coefficient b according to Piketty approach which takes into

account the differences between the income classes). The amounts for are in currentprices and expressed in thousand euros (currency rate 1 euro = 340,75 drachmas).

Table 2Estimates of Pareto Law implementation

1957 1958 1959 1960

si pi bi si pi bi si pi bi si pi bi

0,234776 0,742097 1,9847 0,234776 0,918128 1,849993 0,234776 0,906648 1,848544 0,29347 0,79183296 1,822031

0,29347 0,474401 1,98208 0,29347 0,56427 1,851169 0,29347 0,533086 1,892392 0,586941 0,17450045 1,799109

0,586941 0,115434 2,012736 0,586941 0,130181 1,815206 0,586941 0,121733 1,901984 1,173881 0,03727771 1,757225

1,173881 0,031733 1,890596 1,173881 0,029358 1,740273 1,173881 0,033309 1,728359 1,760822 0,01528471 1,714778

1,760822 0,012664 1,94636 1,760822 0,012487 1,643734 1,760822 0,013872 1,647706 2,347762 0,00781219 1,69572

2,934703 0,005095 1,782857 2,347762 0,006777 1,551074 2,347762 0,007221 1,591497 2,934703 0,00515151 1,599747

5,869406 0,001601 1,458182 2,934703 0,003778 1,515321 2,934703 0,004253 1,534081 5,869406 0,00084915 1,54735

5,869406 0,000606 1,380667 5,869406 0,000514 1,59625 8,804109 0,00033966 1,450833

8,804109 0,000202 1,21181 8,804109 0,000285 1,318 14,67351 5,661E-05 1,2606

1961 1962 1963 1964


0,29347 0,880122 1,803441 0,29347 1,091986 1,781368 0,29347 1,358657 1,806689 0,29347 1,68135913 1,832642

0,586941 0,190855 1,771673 0,586941 0,232967 1,739226 0,586941 0,295981 1,759566 0,586941 0,39179182 1,731969

1,173881 0,038957 1,756345 1,173881 0,04743 1,690243 1,173881 0,060959 1,710011 1,173881 0,08015308 1,666628

1,760822 0,015549 1,733625 1,760822 0,018051 1,66687 1,760822 0,0236 1,684356 1,760822 0,02952425 1,649228

2,347762 0,007999 1,722816 2,347762 0,008593 1,691968 2,347762 0,011452 1,695382 2,347762 0,01412511 1,665113

2,934703 0,00508 1,659431 2,934703 0,00558 1,59965 2,934703 0,006643 1,696092 2,934703 0,00817041 1,656119

5,869406 0,000982 1,471886 5,869406 0,000949 1,430382 5,869406 0,001251 1,581444 5,869406 0,0014956 1,616833

8,804109 0,000309 1,416333 8,804109 0,000363 1,239538 8,804109 0,000389 1,617952 8,804109 0,00055393 1,5664

14,67351 8,42E-05 1,0874 14,67351 2,79E-05 1,2012 14,67351 0,000167 1,176667 14,67351 0,00019387 1,362114

1965 1966 1967 1968


0,29347 1,993786 1,886044 0,29347 2,524448 1,905181 0,29347 3,698953 1,856634 0,29347 4,32965177 1,843921

0,586941 0,50489 1,735984 0,586941 0,655569 1,7284 0,586941 0,896622 1,713027 0,586941 1,05743527 1,678609

1,173881 0,100758 1,680607 1,173881 0,128202 1,693448 1,173881 0,176663 1,638198 1,173881 0,19968654 1,628672

1,760822 0,037491 1,665174 1,760822 0,050515 1,636919 1,760822 0,065576 1,59508 1,760822 0,07232401 1,599003

2,347762 0,018277 1,667592 2,347762 0,024409 1,625995 2,347762 0,031017 1,577644 2,347762 0,03362716 1,59879

2,934703 0,010283 1,685386 2,934703 0,013545 1,631594 2,934703 0,016955 1,573584 2,934703 0,01839112 1,605012

5,869406 0,001792 1,765862 5,869406 0,002381 1,603902 5,869406 0,002434 1,588106 5,869406 0,00291238 1,651435

8,804109 0,000744 1,70579 8,804109 0,000848 1,57529 8,804109 0,000892 1,492242 8,804109 0,00102472 1,651842

14,67351 0,000276 1,49136 14,67351 0,000137 1,95808 14,67351 0,000108 2,2186 14,67351 0,00021573 1,901625

1969 1970 1971 1972


0,29347 5,113991 1,86364 0,29347 6,086118 1,877136 0,29347 7,318589 1,901334 0,29347 8,43860633 1,954118

0,586941 1,280022 1,683059 0,586941 1,584177 1,665915 0,586941 1,979683 1,666709 0,586941 2,42078755 1,695195

1,173881 0,246568 1,622399 1,173881 0,28694 1,625957 1,173881 0,356482 1,619718 1,173881 0,46251959 1,623902

1,760822 0,089041 1,584844 1,760822 0,104681 1,585232 1,760822 0,12897 1,584312 1,760822 0,16745235 1,589327


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23

5,869406 2,55631 1,37424 5,869406 3,670263 1,396983 5,869406 5,132218 1,414223 5,869406 8,06561344 1,47511

8,804109 0,488418 1,473708 8,804109 0,828308 1,412573 8,804109 1,271627 1,390899 8,804109 2,49557749 1,388356

14,67351 0,079992 1,739881 14,67351 0,129498 1,552988 14,67351 0,182466 1,541167 14,67351 0,36301329 1,480406

1989 1990 1991 1992


0,880411 47,00585 5,428027 0,880411 49,50016 6,366243 0,880411 54,11583 7,109599 8,804109 13,3385165 1,589825

1,173881 44,99226 4,214158 1,173881 47,83878 4,910263 1,173881 52,52162 5,467648 10,27146 9,90685438 1,514738

1,467351 43,01525 3,48497 1,467351 46,08129 4,043893 1,467351 50,8507 4,48837 11,73881 7,42706847 1,455842

1,760822 40,92693 3,005642 1,760822 44,33901 3,466368 1,760822 49,1558 3,837781 13,20616 5,5160105 1,416015

2,347762 36,17869 2,43517 2,347762 40,67488 2,755315 2,347762 45,62228 3,033638 14,67351 4,0105177 1,396982

2,934703 31,30036 2,111409 2,934703 36,23225 2,364621 2,934703 41,23033 2,589478 16,14087 2,8871124 1,393692

5,869406 12,38302 1,559655 5,869406 17,57083 1,656999 5,869406 22,43395 1,764558 17,60822 2,07998508 1,402325

8,804109 4,860978 1,40239 8,804109 7,876316 1,471003 8,804109 11,03958 1,552878 19,07557 1,53655618 1,413088

14,67351 0,721717 1,452065 14,67351 1,537022 1,413907 14,67351 2,852073 1,419906 20,54292 1,16457628 1,42389

1993 1994 1995 1996


8,804109 16,27663 1,649335 8,804109 23,03072 1,732737 8,804109 26,67868 1,80121 8,804109 29,7897646 1,884477

10,27146 12,25835 1,574074 10,27146 17,91436 1,645317 10,27146 21,20836 1,703565 10,27146 24,3623695 1,768321

11,73881 9,430607 1,510161 11,73881 14,10787 1,57594 11,73881 16,89934 1,632424 11,73881 19,6776567 1,693106

13,20616 7,301843 1,459059 13,20616 11,20563 1,519711 13,20616 13,64113 1,572617 13,20616 16,0110603 1,633976

14,67351 5,608067 1,423302 14,67351 8,927123 1,474856 14,67351 11,09626 1,522516 14,67351 13,2203473 1,580901

16,14087 4,218733 1,406183 16,14087 7,048229 1,444142 16,14087 9,05254 1,481417 16,14087 11,0165923 1,53405

17,60822 3,134965 1,403982 17,60822 5,50667 1,42647 17,60822 7,360369 1,450107 17,60822 9,20495171 1,494579

19,07557 2,338919 1,410538 19,07557 4,279677 1,41901 19,07557 5,927424 1,429972 19,07557 7,68500259 1,462508

20,54292 1,780668 1,418785 20,54292 3,326619 1,419394 20,54292 4,719913 1,42115 20,54292 6,3723911 1,439349

1997 1998 1999 2000


22,01027 7,387742 1,463787 22,01027 8,763605 1,513738 22,01027 9,380138 1,594486 22,01027 10,2881645 1,624866

23,47762 6,284309 1,443242 23,47762 7,587336 1,489053 23,47762 8,253866 1,566717 23,47762 9,09832516 1,595934

26,41233 4,419561 1,426681 26,41233 5,617023 1,457343 26,41233 6,358994 1,526706 26,41233 7,14882839 1,548444

29,34703 3,062294 1,433463 29,34703 4,056402 1,451604 29,34703 4,81603 1,510505 29,34703 5,5465962 1,522173

32,28173 2,174441 1,446862 32,28173 2,928003 1,461425 32,28173 3,612557 1,513375 32,28173 4,24304575 1,516222

35,21643 1,614573 1,454941 35,21643 2,187241 1,469773 35,21643 2,752092 1,522256 35,21643 3,24353099 1,523531

38,15114 1,234778 1,461086 38,15114 1,690892 1,473406 38,15114 2,16764 1,525363 38,15114 2,54865641 1,528235

41,08584 0,974593 1,461962 41,08584 1,338538 1,475053 41,08584 1,748355 1,525245 41,08584 2,04901129 1,530429

44,02054 0,780425 1,463942 44,02054 1,078694 1,475851 44,02054 1,427009 1,526815 44,02054 1,67910465 1,530465

46,44167 0,657658 1,465022 46,44167 0,914682 1,475232 46,44167 1,223176 1,526276 46,44167 1,43755482 1,530933

2001 2002 2003 2004


41,08584 2,443663 1,530027 41,086 3,066656 1,526047 41,086 3,572357 1,528665 41,086 4,53180364 1,493063

44,02054 1,995658 1,531935 44,021 2,492656 1,530059 44,021 2,902454 1,533315 44,021 3,6603854 1,495435

46,95525 1,657261 1,531929 46,955 2,061467 1,532143 46,955 2,398238 1,536328 46,955 2,98073057 1,501082

49,88995 1,393007 1,531429 49,89 1,729264 1,532801 49,89 2,008515 1,538403 49,89 2,4648974 1,505599

52,82465 1,181304 1,531469 52,825 1,463927 1,533983 52,825 1,700261 1,54027 52,825 2,06474509 1,50932

55,75935 1,009725 1,532068 55,759 1,251596 1,534797 55,759 1,453857 1,541661 55,759 1,75069827 1,511909

58,69406 0,869897 1,532832 58,694 1,079901 1,534952 58,694 1,254615 1,542433 58,694 1,50264298 1,512606


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66,03081 0,620289 1,532392 66,031 0,767641 1,53699 66,031 0,896329 1,543243 66,031 1,05586437 1,515545

73,36757 0,455929 1,534944 73,368 0,564852 1,539934 73,368 0,666608 1,541344 73,368 0,77076329 1,51835

80,70433 0,345978 1,536436 80,704 0,428654 1,542548 80,704 0,506607 1,543227 80,704 0,58087175 1,520642

88,04109 0,269772 1,536318 88,041 0,333145 1,54523 88,041 0,396963 1,541211 88,041 0,44827609 1,523531

95,37784 0,213009 1,540445 95,378 0,265508 1,545259 95,378 0,315118 1,542981 95,378 0,35354303 1,526109

102,7146 0,172989 1,538655 102,715 0,215261 1,545053 102,715 0,255865 1,541523 102,715 0,2842162 1,528065

110,0514 0,141324 1,541618 110,051 0,176611 1,546408 110,051 0,209709 1,542967 110,051 0,23200836 1,530049

117,3881 0,118031 1,539695 117,388 0,148053 1,542648 117,388 0,175881 1,538593 117,388 0,19235899 1,530596

132,0616 0,085489 1,531902 132,062 0,105412 1,545428 132,062 0,126003 1,536773 132,062 0,13679883 1,531617

146,735 0,092688 1,539904 146,735 0,1004167 1,535279

2005 2006 2007 2008


50 2,842296 1,510931 50 3,325283 1,515523 50 4,086364 1,518819 50 4,7391999 1,509207

55 2,119589 1,517488 55 2,491463 1,520385 55 3,081902 1,520623 55 3,56447588 1,510484

60 1,629805 1,521794 60 1,925599 1,522301 60 2,386378 1,521546 60 2,75236898 1,51108

65 1,282928 1,525101 65 1,517993 1,524795 65 1,886072 1,522547 65 2,17176615 1,511222

70 1,027627 1,52891 70 1,21745 1,527786 70 1,51538 1,524144 70 1,742043 1,511992

75 0,838152 1,531369 75 0,995572 1,528656 75 1,234644 1,526497 75 1,41676471 1,513597

80 0,694821 1,532273 80 0,824736 1,529568 80 1,019716 1,528813 80 1,1636011 1,517267

85 0,57997 1,535783 85 0,692632 1,529246 85 0,853407 1,530364 85 0,96884956 1,520195

90 0,490903 1,537414 90 0,585973 1,530442 90 0,721641 1,531891 90 0,81565819 1,523027

95 0,418839 1,539683 95 0,499728 1,532198 95 0,616767 1,532683 95 0,69640512 1,523381

100 0,35976 1,542945 100 0,428864 1,535119 100 0,528979 1,535966 100 0,59693542 1,526063

110 0,272151 1,547829 110 0,324569 1,538202 110 0,398812 1,541276 110 0,44848469 1,531575

120 0,211411 1,55161 120 0,253215 1,538008 120 0,309981 1,543772 120 0,34524594 1,537756

130 0,167946 1,554758 130 0,20133 1,538197 130 0,245671 1,546859 130 0,27309775 1,540932

140 0,134669 1,562771 140 0,16236 1,540147 140 0,196984 1,5534 140 0,22043141 1,542796

150 0,109935 1,569629 150 0,132053 1,545726 150 0,161718 1,555401 150 0,17987632 1,54701

160 0,091373 1,573884 160 0,108719 1,552544 160 0,13523 1,554335 160 0,14927155 1,549336

170 0,113737 1,556237 170 0,12553484 1,550497

180 0,096735 1,557321 180 0,10647177 1,552776

2009

si pi bi

50 5,216849 1,497599

55 3,932169 1,495205

60 3,030408 1,49403

65 2,388311 1,491919

70 1,910227 1,491091

75 1,551496 1,490309

80 1,277276 1,489434

85 1,064383 1,488378

90 0,896098 1,487297

95 0,759156 1,487718

100 0,64935 1,487618

110 0,485137 1,488133

120 0,370474 1,490577


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25

130 0,290000 1,49146

140 0,230784 1,493264

150 0,186677 1,494876

160 0,154113 1,493098

170 0,127947 1,494318

180 0,108063 1,49224

Source: ELSTATbulletins and General Secretariat of Informative Systems bulletins and authors calculations

6. Control Total for Income

For the estimation of income control total several sources have been used. The main

sources are the Bulletins of National Accounts, Eurostat publications for the GDP,

ELSTAT data for the CPI, General Government Accounts and GDP Accounts and

Data from Ministry of Finance 2001 study.

The main aim is to compile a control total for income that is comparable (to thepossible extent) with the declared tax income. Using the National Accounts as a base,

certain components of the sector of Households are needed, mainly wages, property

income, social benefits and other current transfers.

The series for 1988-1995 (National Account Bulleting 1988-1995) are according to

mixed system (ESA 1979 and ESA 1995). According to the definition the households

sector (S80) covers individuals or groups of individuals as consumers and possibly

also entrepreneurs provided that in the latter case, the corresponding activities are not

those of separate entities treated as quasi-corporate enterprises. The principal

resources of these units are derived from the compensation of employees, property

income, transfers from other sectors or the proceeds from the sale of products. Table

3 includes Gross Value Added at market prices for Households and Total Economy(N1), Gross Wages (R101), Property Income (R40) and current transfers (R60).

The series 1995-2000 are according to ESA 1995 with the year 1995 being the base

year. S14 is the sector of households and it is not to be confused with sector S15

which is non-profit institutions serving Households (NPISH), since Greek National

Accounts provide separate accounts. Table 4 illustrates Gross Value Added/GDP for

total Economy and Households Sector (B1g), Wages and Salaries (D11), Social

Benefits (D62) and Other Current Transfers (D7).


year. Table 5 illustrates the transactions described in the previous paragraph.


year. Table 6 illustrates the transactions described in the paragraph for 1995-2000

series.

Table 3Data 1988-1995 National Accounts Bulletin - mio euroscurrent values

GROSS VALUE ADDED AT

MARKET PRICES

PRIMARY

INCOME/GNI

S80_PRIMARY

INCOME GNI

GROSS

WAGES

PROPERTY INCOME CURRENT

TRANSFERS

N1

(1)

N1-

HOUSEHOLDS

(2)

(3) (4) R101

(5)

R40

(6)

R60

(7)

(8) = (5)

+(6)+(7)

1988 26.908 13.518 27.274 22.885 7.086 3.312 5.079 15.477

1989 31.974 16.218 32.466 27.853 8.872 4.122 5.978 18.971

1990 38.571 19.076 39.659 34.596 11.003 6.071 7.198 24.273

1991 47.632 23.990 49.171 41.445 12.454 6.735 8.973 28.163

1992 55.073 26.950 57.033 47.584 13.874 8.279 10.586 32.739

1993 62.027 30.156 64.035 53.172 15.502 8.901 12.042 36.445

1994 70.385 34.173 72.676 61.542 17.505 11.233 14.151 42.890

1995 78.895 37.785 81.206 68.099 20.375 11.444 15.949 47.768

Sources: ELSTAT, 1988-1995 National Accounts Bulletin


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26

Table 4ELSTAT data - mio euroscurrent values

VALUEADDED

GROSS/GDP

S14_VALUEADDED

GROSS/GDP

PRIMARY

INCOME,GROSS/GNI

S14_'PRIMARY

INCOME,GROSS/GNI WAGES PROPERTY INCOME

SOCIAL

BENEFITS

OTHERCURRENT

TRANSFERS

B1g(1)

B1g(2)

B5(3)

B5(4)

D11(5)

D4(6)

D62(7)

D7(8)

(9)=(5)+(6)+(7)+(8)

1995 79.927 38.061 82.456 68.425 20.533 11.267 12.143 3.061 47.004

1996 87.851 42.132 90.302 74.399 21.905 11.694 13.625 2.984 50.207

1997 97.235 48.459 99.959 82.799 25.007 10.849 15.253 2.964 54.073

1998 105.773 52.460 108.639 89.668 27.716 11.698 16.744 3.530 59.688

1999 112.660 54.702 114.889 93.759 28.993 11.916 18.189 4.146 63.244

2000 121.516 58.710 123.407 97.694 31.123 10.052 19.973 3.357 64.504

Sources: ELSTAT


VALUEADDED

GROSS/GDP

S14_VALUEADDED

GROSS/GDP

PRIMARY

INCOME,GROSS/GNI

S14_'PRIMARY


SOCIAL

BENEFITS

OTHERCURRENT

TRANSFERS

B1g

(1)

B1g

(2)

B5g

(3)

B5g

(4)

D11

(5)

D4

(6)

D62

(7)

D7

(8)

(9)=

(5)+(6)+(7)+(8)

2000 136.281 50.409 136.646 104.098 36.001 18.248 20.354 3.201 77.804

2001 146.428 54.451 147.354 109.807 37.822 16.254 22.716 3.269 80.061

2002 156.616 57.533 157.028 116.758 43.434 13.444 24.456 3.269 84.603

2003 172.432 63.132 171.412 125.133 46.902 12.235 27.620 3.746 90.5032004 185.266 66.188 183.950 132.469 51.007 12.580 29.174 4.104 96.865

2005 194.819 70.090 191.744 140.576 53.755 13.854 32.353 3.924 103.885

2006 211.298 74.565 206.762 150.434 58.540 15.960 35.970 3.922 114.392

2007 227.074 77.416 220.301 171.019 62.990 29.884 40.371 3.770 137.015

2008 236.918 79.830 229.198 171.293 67.065 22.909 45.917 4.160 140.052

Sources: ELSTAT


VALUEADDED

GROSS/GDP

S14_VALUEADDED

GROSS/GDP

PRIMARY

INCOME,GROSS/GNI

S14_'PRIMARY


SOCIAL

BENEFITS

OTHERCURRENT

TRANSFERS

B1g

(1)

B1g

(2)

B5g

(3)

B5g

(4)

D11

(5)

D4

(6)

D62

(7)

D7

(8)

(9)=

(5)+(6)+(7)+(8)

2005 193.050 68.153 190.241 143.162 53.623 16.019 33.285 3.633 106.561

2006 208.893 72.791 204.342 149.472 56.949 16.656 37.006 3.496 114.107

2007 222.771 77.235 216.487 169.279 60.925 28.177 41.157 3.337 133.597

2008 232.921 76.871 225.325 165.482 65.156 20.864 47.217 3.665 136.902

2009 231.642 74.712 226.000 166.242 68.226 19.267 50.475 3.055 141.022

Sources: ELSTAT

The approach to derive the control total for income contains the following steps.

- For the years 1988-1995 we calculate the sum of Wages (R101), Property Income

(R40) and Current Transfers (R60) (Table 3column 8)

- For the years 1995-2000 we calculate the sum of Wages (D11), Property Income

(D4), Social Benefits (D62) and Other Current Transfers (D7) (Table 4column 9)


(D4), Social Benefits (D62) and Other Current Transfers (D7) (Table 5column 9)


(D4), Social Benefits (D62) and Other Current Transfers (D7) (Table 6column 9)- These transactions are homogeneous enough (in practice a breakdown of old

current transfers took place). In the case of two sources of data for the same year,

newer data are preferred.

- The Wages illustrate gross income meaning that the employees social contributions

are included. These amounts should be deducted since they are not reported in tax

declarations

- In order to estimate these amounts the General Government Accounts are used. The

Actual Social Contributions of Employees (D61121) received by General

Government, that is Central Government (S1311) and Social Security Funds (S1314)

are utilized.


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27

- These amounts are deducted from the Wages for the years 1988-2009. More

specifically, the Net Wages are presented in Table 7 - column 5 (1988-1995), Table

8column 5 (1995-2000) and Table 9column 5 (2000-2009)

- The net income of self employed is not captured from the figures mentioned so far.

From National Accounts point of view, this income is incorporated in Gross

Operational Surplus (GOS) of Self-employed, which is a relatively close to theconcept of tax income of self employed (declared income provided one has profits).

- To estimate the Gross Operational Surplus of Self Employed, we use the figures of

Total Employment, Number of Self Employed (ESE) and Number of Employees

(EEM). The Average Compensation of EEM is calculated and this figure is applied in

the number of self employed. Then the estimated amount of Compensation of ESE

is deducted from the Mixed Income of S14 (Compensation of ESE and GOS of

ESE). The remaining amount is the GOS of ESE.

- The new sum of income is illustrated in Table 7 column 9 (1988-1995), Table 8

column 10 (1995-2000) and Table 9column 10 (2000-2009).

- The sum of income as percentage of GDP (Gross Value Added at market prices

that is N1 or B1g) is calculated.- This percentage is applied in the GDP series that has been compiled by Eurostat.

This series is according to ESA 95 and is totally homogeneous (thus comparable).

- The GDP figures of 1957, 1958 and 1959 are estimated using the (reverse) growth

rate of GDP_ELSTAT and this rate was applied in GDP of 1960 by Eurostat.

- Then the average percentage of the sum of income for the years 1988-2009 was

calculated and applied in the estimated GDP.

- Applying these percentages in the GDP by Eurostat we obtain the amounts (for the

total control) for the years 1957-1959 and 1988-2009.

- Linear interpolation is applied for the missing years. The known variable is the

GDP (by Eurostat).

- The results are presented in Table 10.

Table 7Estimation of Income/GDP, 1988-1995 mio euroscurrent prices

GROSS VALUE ADDED AT MARKET PRICESGROSS

WAGES

GOS SELF

EMPLOYED

PROPERTY

INCOME

CURRENT

TRANSFERS

TOTAL PERCENTAGE OF

INCOME/GDP

N1

(1)

N1-HOUSEHOLDS

(2)

R101

(3)

d61121

(4)

net R101

(5)=(3)-(4)

GOS S.E.

(6)

R40

(7)

R60

(8)

(9)=(5)+(6) +

(7)+(8)

% N1

10=(9)/(1)

1988 26.908 13.518 7.086 840 6.246 1.079 3.312 5.079 15.716 0,584042

1989 31.974 16.218 8.872 958 7.914 1.916 4.122 5.978 19.930 0,623306

1990 38.571 19.076 11.003 1.313 9.690 1.111 6.071 7.198 24.070 0,624053

1991 47.632 23.990 12.454 1.595 10.859 3.414 6.735 8.973 29.981 0,629441

1992 55.073 26.950 13.874 1.809 12.065 3.530 8.279 10.586 34.459 0,625706

1993 62.027 30.156 15.502 2.383 13.119 4.201 8.901 12.042 38.263 0,616871

1994 70.385 34.173 17.505 2.920 14.585 6.002 11.233 14.151 45.972 0,653152

1995 78.895 37.785 20.375 3.442 16.933 5.797 11.444 15.949 50.122 0,635305

Sources: ELSTAT, published and unpublished data and authors calculations


VALUE

ADDED

GROSS/GDP

S14_VALUE

ADDED

GROSS/GDP

WAGESGOS SELF

EMPLOYED

PROPERTY

INCOME

SOCIAL

BENEFITS

OTHER

CURRENT

TRANSFERS

TOTAL PERCENTAGE OF

INCOME/GDP

B1g

(1)

B1g

(2)

D11

(3)

D61121

(4)

NET D11

(5)=(3)-(4)

GOS S.E.

(6)

D4

(7)

D6

(8)

D7

(9)

(10)=(5)+(6)+

(7)+(8)+(9)

% B1g

(11)=(10)/(1)

1995 79.927 38.061 20.533 3.442 17.091 5.147 11.267 12.143 3.061 48.708 0,609409

1996 87.851 42.132 21.905 3.849 18.056 6.203 11.694 13.625 2.984 52.562 0,59831

1997 97.235 48.459 25.007 4.249 20.759 5.867 10.849 15.253 2.964 55.691 0,57275

1998 105.773 52.460 27.716 4.576 23.140 5.999 11.698 16.744 3.530 61.111 0,577757

1999 112.660 54.702 28.993 5.088 23.905 5.224 11.916 18.189 4.146 63.380 0,562579

2000 121.516 58.710 31.123 5.602 25.521 6.279 10.052 19.973 3.357 65.182 0,536405



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GrossDomestic

Product

S14_GrossDomestic

Product

Wages andsalaries

GOS SELFEMPLOYED

PROPERTYINCOME

SOCIALBENEFITS

OTHERCURRENT

TRANSFERS

TOTAL PERCENTAGE OFINCOME/GDP

B1g(1)

B1g(2)

D11(3)

D61121(4)

NET D11(5)=(3)-(4)

GOS S.E.(6)

D4(7)

D6(8)

D7(9)

(10)=(5)+(6)+(7)+(8)+(9)

% B1g(11)=(10)/(1)

2000 136.281 50.409 36.001 5.602 30.399 4.768 18.248 20.354 3.201 76.970 0,564788

2001 146.428 54.451 37.822 5.204 32.618 7.143 16.254 22.716 3.269 82.000 0,560004

2002 156.616 57.533 43.434 7.020 36.414 5.173 13.444 24.456 3.269 82.756 0,528401

2003 172.432 63.132 46.902 8.032 38.870 7.307 12.235 27.620 3.746 89.778 0,520657

2004 185.266 66.188 51.007 8.114 42.893 7.359 12.580 29.174 4.104 96.111 0,518772

2005 193.050 68.153 53.623 8.684 44.939 5.818 16.019 33.285 3.633 103.695 0,53714

2006 208.893 72.791 56.949 8.680 48.269 8.953 16.656 37.006 3.496 114.379 0,547549

2007 222.771 77.235 60.925 9.421 51.504 9.820 28.177 41.157 3.337 133.996 0,601498

2008 232.921 76.871 65.156 9.793 55.363 7.898 20.864 47.217 3.665 135.008 0,579629

2009 231.642 74.712 68.226 8.875 59.351 4.806 19.267 50.475 3.055 136.953 0,591229


Table 10Control Total for income - mio euros current prices

GDP_EUROSTAT (1) FINAL SERIES (2) declared income (3) (4)=(3/(2)

1957 317 185 31 0,166

1958 333 194 37 0,190

1959 347 202 39 0,194

1960 368 215 46 0,215

1961 421 246 49 0,201

1962 442 258 50 0,194

1963 500 292 58 0,199

1964 566 330 64 0,195

1965 652 381 75 0,196

1966 728 425 89 0,210

1967 786 459 129 0,280

1968 855 499 145 0,290

1969 984 575 171 0,297

1970 1.113 650 196 0,302

1971 1.236 721 232 0,322

1972 1.430 835 269 0,322

1973 1.869 1.091 347 0,318

1974 2.147 1.254 413 0,329

1975 2.583 1.508 490 0,325

1976 3.213 1.876 602 0,321

1977 3.763 2.198 751 0,3421978 4.592 2.682 1.078 0,402

1979 5.699 3.328 1.346 0,405

1980 6.842 3.996 1.642 0,411

1981 8.190 4.783 2.087 0,436

1982 10.301 6.016 2.675 0,445

1983 12.291 7.178 3.169 0,441

1984 15.286 8.928 3.972 0,445

1985 18.651 10.893 5.239 0,481

1986 22.288 13.017 6.029 0,463

1987 25.107 14.663 7.038 0,480

1988 30.551 17.843 8.648 0,485

1989 36.309 22.631 10.786 0,477

1990 43.822 27.347 13.483 0,493

1991 54.121 34.066 16.515 0,485

1992 62.565 39.147 18.997 0,485

1993 70.447 43.457 21.821 0,502

1994 79.891 52.181 28.608 0,548

1995 89.555 54.576 32.501 0,596

1996 98.397 58.872 36.667 0,623

1997 108.886 62.365 42.494 0,681

1998 118.398 68.405 46.920 0,686

1999 126.155 70.972 49.592 0,699

2000 136.281 76.970 54.512 0,708

2001 146.428 82.000 58.657 0,715

2002 156.615 82.756 64.236 0,776

2003 172.431 89.777 68.681 0,765

2004 185.266 96.111 75.728 0,788

2005 193.050 103.695 80.558 0,777

2006 208.893 114.379 86.006 0,752

2007 222.771 133.996 93.324 0,696

2008 232.921 135.008 98.061 0,726

2009 231.642 136.953 100.301 0,732

Sources: Eurostat, ELSTAT and authors calculations

Documents

TR 256_Top Income Shares in Greece