Luxembourg Income Study Data Research Articles

Converging economies of care? Immigrant women workers across 17 countries and four care regimes.

This study analyses 17 care economies using 2016 Luxembourg Income Study data to contribute to extant debate regarding the ongoing utility of care regimes as a classificatory schema for cross-national comparison. Examining similarities and differences in the provision of low-status work in health, education, social work, and domestic services - the 'care economy' - the data reveal devaluation of the labour done by immigrant women care workers, net of national and regime-level variation. In addition, numerous similarities across liberal, corporatist, social democratic, and central and eastern European care regimes emerge, in terms of the overrepresentation of immigrant women in low status care work, and the disproportionate financial penalties these workers incur. Together, findings suggest that notwithstanding national and policy-specific differences, there has been considerable convergence across economies of care towards a 'migrant in the market' model of employment. Such large-scale evidence of this trend calls into question the ongoing efficacy of care regimes for national comparisons of migrant care work under conditions of neoliberal globalization.

What Determines Social Service Workers’ Wages: A Cross-Country Analysis Using a Luxembourg Income Study

Abstract The study is aimed at exploring the influencing factor of wages among social service workers (SSWs) through a cross-country analysis. Using Luxembourg Income Study data, two aspects are emphasised: first, the trends and patterns of wage levels among SSWs. Second, the determining factors that influence their low wages at a cross-national level and how those factors are intersectionally intertwined to exacerbate the wage level. Three significant findings are confirmed: a universal gendered wage gap; a more significant wage gap for those on part-time and/or fractured contracts and employed in the private sector; and a substantial association between a higher education and higher wages. Two policy concerns are raised for discussion: first, tackling the gendered wage gap and ensuring more secure employment, and a guaranteed living wage for those employed in the private sector. Second, enhancing the professionalism for empowering their effective choices in the labour market is essential.

The net tax-benefit position and the role of self-interest in attitudes towards the welfare state

This paper examines to what extent the actual net tax-benefit position (redistribution outcome) affects support towards the welfare state besides the typical indicator for self-interest, income. This paper then explores how own and partner’s socio-demographic factors affect support based on self-assessed social risks while ideology and beliefs mitigate self-interested judgements.
 This paper integrates tax and benefit information from Luxembourg Income Study and attitudes data in European Social Survey using Statistical Matching. The technique integrates target variables that are distinctively observed in two sources using common variables which best explain the target variables in each data set. Using the linked data set, it adopts a multi-level model to explore institutional and individual factors. At the macro level, it investigates progressivity and sizes of taxes and transfers of nineteen European countries. Also, household arrangements including living with children and/or partner and demographics including age, gender, education, occupation, and own economic outlook are examined.
 Using a more direct indicator for self-interest, the net tax-benefit position, expected results of the analysis are in three folds. First, those who pay more taxes and receive less benefits are less supportive of the welfare state despite the same income level. Second, those who are more likely to benefit from the welfare state are more likely to be supportive of the welfare state. For example, those who live with children may be more supportive due to higher likelihood to receive family benefits. Similarly, subjective assessment to benefit from the welfare state due to higher social risks such as unemployment or sickness leads to more positive attitudes. Third, those who are politically left and have less meritocratic values are likely to be more supportive.
 Due to the data limitation, the impact of income-tax-benefit positions on welfare attitudes was not directly measured. This paper contributes to this discussion using the Statistical Matching and Multi-level modelling which explores interactions of actual net tax-benefit position, potential benefits based on social position/risks, and mitigating beliefs.

Regional income inequality in Egypt: evolution and implications for Sustainable Development Goal 10

ABSTRACT Research on income inequality in developing economies has scarcely looked at the regional dimension. This is important, as progress in reducing income inequality at national level can only be partially successful if a country consists of very unequal regions alongside relatively equal ones. Using newly assembled Luxembourg Income Study data, we study the evolution of income inequality within Egyptian regions during 1999–2015. The analysis offers three findings. First, income inequality has generally increased. Second, regional differences in income inequality tended to decrease, but less unequal regions are converging to similar levels of inequality of more unequal regions. Third, there has been a decrease in the income share of the bottom 40% and an increase in the proportion of people living below 50% of median income. Hence, geographically diffused progress on the first two targets of SDG 10 depends on reversing these trends.

Labor market dualism and the heterogeneous wage gap for temporary employment: a multilevel study across 30 countries

Abstract This study investigates the hourly wage gap between 25- and 55-year-old temporary and permanent employees across 30 countries worldwide based on Luxembourg Income Study data from 2000 to 2019 supplemented by other survey data. Two-stage multilevel regressions reveal wage disadvantages for temporary workers, particularly for prime-age workers and those working in medium-/high-level occupations. There is no evidence that a stronger institutional dualization in terms of stronger employment protection for permanent contracts increases the wage gap. Instead partial deregulation matters: In countries where permanent workers are strongly protected, the wage gap is larger if the use of temporary contracts is deregulated. Moreover, results suggest that the larger the size of the temporary employment segment the larger the wage gap. Thus, our findings indicate that stronger institutional and structural labor market dualism amplifies labor market inequality in terms of wage gaps between temporary and permanent workers.

Financialization and income generation in the 21st century: rise of the petit rentier class?

Abstract This article considers the consequences of asset-based accumulation for household income factors and social class structure in 29 countries from 1998 to 2016. Are financialization, asset-based welfare institutions, and rising real estate returns fueling a growing class of petit rentiers in capitalist economies? That is, households who accrue more than a trivial share of income from capital rather than labor or government transfers. The analysis draws on the Luxembourg Income Study data. Contrary to expectations, most countries saw declines in the share of households who accrue more than 10%, or 20% of income from assets. Estimates from correlated random effects models indicate that financialization is associated with between-country differences in the size of the petit rentier, but not within-country change over time. The decline of the petit rentier can be partly explained by declining interest rates, which reduces income from bank savings.

Comparing Care Regimes: Worker Characteristics and Wage Penalties in the Global Care Chain

Abstract This study uses 2010–2014 Luxembourg Income Study data to measure care work quantitatively within and across four care regimes, with a particular focus on the reliance on migrant women for low-wage, low-status work in health, education, social work, and domestic services. Care regimes are examined in order to highlight similarities and differences in twelve care economies: while liberal and corporatist care regimes are found to display a “migrant in the market” model of employment, familialistic and social democratic regimes exhibit somewhat different employment trends yet continue to financially undervalue highly feminized work in care.

“Left Behind?” Financialization and Income Inequality Between the Affluent, Middle Class, and The Poor

There is increasing scholarly evidence that financialization has contributed to rising income inequality, especially by concentrating income among the affluent and rich. There is less empirical research examining who is losing out to the affluent. This paper fills this gap by examining how three measures of financialization (finance, insurance, and real estate or FIRE employment; credit expansion; and financial crises) affect upper‐tail (measured as the ratio between the 90th and 50th income percentiles) and lower‐tail (measured as the ratio between the 50th and 10th income percentiles) income inequality. Using concepts from economic sociology and the social stratification literature, I develop a perspective that links financialization to income inequality by creating more unequal market incomes while simultaneously reducing redistribution and social transfers. I analyze disposable household income data (after taxes and transfers) from the Luxembourg Income Study (LIS) and other public sources like the OECD from 16 affluent nations between the years 1981 and 2011, and I use an unbalanced panel design due to LIS data coverage. I find that the relative incomes of both the middle class and the poor are hurt by financialization (strongest evidence tied to FIRE employment); however, relative incomes of the poor are especially sensitive to financialization.

Family demography and income inequality in West Germany and the United States

Income inequality has grown in many countries over the past decades. Single country studies have investigated how trends in family demography, such as rising female employment, assortative mating and single parenthood, have affected this development. But the combined effects have not been studied sufficiently, much less in a comparative perspective. We apply decomposition and counterfactual analyses to Luxembourg Income Study data from the 1990s and 2000s for West Germany and the USA. We counterfactually analyse how changes in the distribution of men’s and women’s education, employment and children across households between the 1990s and 2000s affected overall inequality (Theil index). We find that changes in family demography between the 1990s and the 2000s explain inequality growth in West Germany but not in the USA, where the effects of gendered changes in education and employment offset each other. In West Germany, changes in the distribution of household types, and particularly changes in men’s employment and education, contributed to increases in income inequality. The country differences in the relationship between changes in family demography and inequality growth reflect how the decline in men’s and the growth in women’s employment played out differently in the weakening male breadwinner context in West Germany and in the universal breadwinner context in the USA.

The migrant in the market: Care penalties and immigration in eight liberal welfare regimes

This article disaggregates high- and low-status care work across eight liberal welfare regimes: Australia, Canada, Iceland, Ireland, Israel, Switzerland, the United Kingdom and the United States. Using Luxembourg Income Study data, descriptive and multivariate analyses provide support for a ‘migrant in the market’ model of employment, notwithstanding variation across countries. The data demonstrate a wage penalty in both high- and low-status care employment in several liberal welfare regimes, with the latter (service jobs in health, education and social work) more likely to be part-time and situated in the private sector. Migrant care workers are found to work disproportionately in low-status, low-wage types of care and, in some cases, to incur additional wage penalties compared to native-born care workers with equivalent human capital.

Family policy as an institutional context of economic inequality

It is demonstrated that family policies are an important aspect of the institutional context of earnings inequality among coupled households. Although seldom integrated into prominent analyses of economic inequality, women’s earnings are consistently found to reduce relative inequality among households. This means that family policies, as well-known determinants of women’s employment and earnings, are important contextual determinants of economic inequality. Using Luxembourg Income Study data from 18 OECD countries in the period 1981–2008, this study demonstrates that women have higher earnings, and that their earnings reduce inequality among coupled households more in institutional contexts with generous paid leave and public childcare. We found no sizeable association between financial support policies, such as family allowances and tax benefits to families with children, and the degree to which women’s earnings contribute to inequality among coupled households. Family policy arrangements that facilitate women’s employment and earnings are associated with less economic inequality among coupled households.

Contribution of child maintenance to lone mothers’ income in five countries

This study uses the Luxembourg Income Study (LIS) data from 2013 to study (1) the contribution of child maintenance to the income packages of lone mothers, (2) the proportion of lone mothers receiving child maintenance and the level of child maintenance for those receiving it and (3) the extent to which child maintenance is helping families who may need it the most (those at the low end of the income distribution), compared with families with moderate or higher incomes. Our analysis covers data from five countries: Finland, Germany, Spain, United Kingdom and the United States. Our results show that in all countries except the United Kingdom, labour income is an important source of income for lone mothers and less than 40 percent of income comes from social transfers. Child maintenance contributes significantly to the income of lone mothers, particularly in Spain, followed by the United States and Germany. We find the highest coverage of child maintenance receipt in Finland. In the other countries, only one-third of lone mother households receive child maintenance. The median amounts of maintenance are the lowest in the United Kingdom and Finland, but there is great variation in the level of child maintenance within countries. The comparison of the quintile groups reveals that in the United States, the lone mothers in lowest income quintile do not seem to benefit as much from child maintenance compared with the highest income quintiles, whereas in Finland, Germany and Spain, more lone mothers in the low-income quintiles receive maintenance. However, amounts are quite equal across income quintiles.

Comparing the Size of the Middle Class Using the Alienation Component of Polarization

This paper shows how to compare the size of the middle class in income distributions using a polarization index that do not account for identification. We derive a class of polarization indices where the antagonism function is constant in identification. The comparison of distributions using an index from this class motivates the introduction of an alienation dominance surface, which is a function of an alienation threshold. We first prove that a distribution has a large alienation component in polarization compared to another if the former always has a larger dominance surface than the latter regardless of the value of the alienation threshold. Then, we show that the distribution with large dominance surface is more concentrated in the tails and has a smaller middle class than the other distribution. We implement statistical inference and test dominance between pairs of distributions using the asymptotic theory and Intersection Union tests. Our methodology is illustrated in comparing the declining of the middle class across pairwise distributions of twenty-two countries from the Luxembourg Income Study data base.

Income inequality and redistribution in post-industrial democracies: demographic, economic and political determinants 1

This article analyses the determinants of market income distribution and governmental redistribution. The dependent variables are Luxembourg Income Study data on market income inequality (measured by the Gini index) for households with a head aged 25–59 years and the per cent reduction in the Gini index by taxes and transfers. We test the generalizability of the Goldin–Katz hypothesis that inequality has increased in the USA because the country failed to invest sufficiently in education. The main determinants of market income inequality are (in order of size of the effect) family structure (single mother households), union density, deindustrialization, unemployment, employment levels and education spending. The main determinants of redistribution are (in order of magnitude) left government, family structure, welfare state generosity, unemployment and employment levels. Redistribution rises mainly because needs rise (that is, unemployment and single mother households increase), not because social policy becomes more redistributive.

Globalization, Inequality, and the Rich Countries of the G-20: Evidence from the Luxembourg Income (LIS)

The purpose of this study is to summarize and comment upon what we know about the determinants of both the level and trend in economic inequality over the past two decades, and to relate these findings to the progress of globalization in these nations. While the fruits of economic progress in rich nations have not been equally spread, we argue that most citizens in rich Organization for Economic Cooperation and Development (OECD) nations have benefited from the trend toward global economic progress. We begin with a summary of the differences in overall economic inequality within the G-20 nations based on LIS (Luxembourg Income Study) data and recent work by others. Here we find that social policies, wage distributions, time worked, social and labor market institutions and demographic differences all have some influence on why there are large differences in inequality among rich nations at any point in time. In contrast, trade policy has not been shown to have any major impact on economic inequality.Next, we turn to trends in inequality. We find modest and sometimes dissimilar changes in the distribution of income have taken place within most advanced nations, with most finding a higher level of inequality in the mid-to-late 1990s than in the 1980s. Inequality, however, has not risen markedly in some nations (e.g., Denmark, Germany, France, and Canada) over this period, while its rise has slowed in several other nations during the late 1990s. The explanations for rising inequality in rich countries are many, and no one single set of explanations is ultimately convincing. In particular, there is no evidence that we know of that trade and globalization is bad for rich countries.This suggests that rising economic inequality is not inevitable, or that it necessarily hurts low skill-low income families. Rather it suggests that globalization does not force any single outcome on any country. Domestic policies and institutions still have large effects on the level and trend of inequality within rich and middle-income nations, even in a globalizing world economy.

Taxation and the worlds of welfare

We use Luxembourg Income Study (LIS) data to compare the progressivity of the tax structure in the USA and Europe. LIS data allow a comparison of tax rates that attempts to take different starting rates, thresholds and exemptions into account. Our study supports the argument others have made that the USA has more progressive taxes than the European countries. However, we find that Britain's tax structure is more regressive than those of the continental welfare states, making the mapping of tax structure onto the ‘three worlds of welfare’ imperfect. We also show that it is a mistake to assume that income and property taxes are always progressive: regressive examples of both are common in the data. But sales taxes are regressive wherever they are found, and we suggest that the proportion of tax revenue raised through sales taxes can serve as an index of overall progressivity in situations where the detailed data examined here are not available. We close by outlining several possible explanations for the inverse correlation between tax progressivity and welfare state effort.

A Multilevel Analysis of Factors Related to Poverty in Welfare States

This study aims to investigate factors contributing to poverty, one of the most significant social problems in Western societies. To this end, 13 countries that have made a variety of efforts to reduce poverty, and therefore experienced similar development processes related to welfare, were selected. To overcome the methodological limitations of previous studies, the study utilized a Hierarchical Generalized Linear Model to simultaneously analyze individual-level and state-level factors that might affect the poverty status of a household, employing household data from the fifth wave of Luxembourg Income Study and Comparative Welfare State data. By comparing the magnitude of individual- and state-level effects in the analysis process, the model can empirically illuminate which of the two levels is more responsible for households’ destitution. Furthermore, by analyzing the level of and characteristics of poverty in each country, this study examines whether there are discrepancies in the level of poverty across types of welfare states and what factors contribute to these discrepancies.

The Gender Pay Gap across Countries: A Human Capital Approach

The gender wage gap varies across countries. For example, among OECD nations women in Australia, Belgium, Italy and Sweden earn 80% as much as males, whereas in Austria, Canada and Japan women earn about 60%. Current studies examining cross-country differences focus on the impact of labor market institutions such as minimum wage laws and nationwide collective bargaining. However, these studies neglect labor market institutions that affect women’s lifetime work behavior -- a factor crucially important in gender wage gap studies that employ individual data. This paper explicitly concentrates on labor market institutions that are related to female lifetime work that affect the gender wage gap across countries. Using ISSP (International Social Survey Programme), LIS (Luxembourg Income Study) and OECD wage data for 35 countries covering 1970-2002, we show that the gender pay gap is positively associated with the fertility rate (treated exogenously and endogenously with religion as the instrument), positively associated with the husbandwife age gap at first marriage, and positively related to the top marginal tax rate, all factors which negatively affect women’s lifetime labor force participation. In addition, we show that collective bargaining, as found in previous studies, is negatively associated with the gender pay gap.

The international child poverty gap: Does Demography matter?

According to the Luxembourg Income Study data, the U.S. child poverty rate is the second highest among 15 high-income nations. The present work reveals that 55% of all American children living in a household headed by a single female with no other adult present live in poverty-the highest rate for any of the five living arrangements in the 15 countries examined in this study. While previous analyses have focused on market forces and governmental redistribution across households, we question the contribution of demographic factors that place children in family structures with different poverty risks relative to other factors such as differential market opportunities and governmental benefits for adults caring for children in various living arrangements. Applying a classic demographic decomposition technique to the overall poverty gap, we find that the distributional effect of demographic behavior contributes little to the U.S. poverty gap with other nations (and none with respect to the United Kingdom). Overall differences in labor markets and welfare schemes best explain the U.S. child poverty gap, although for some countries, the gap is accentuated by the gradient of governmental transfers, and for most countries, by the gradient of market earnings across living arrangements.

The impact of taxes and transfer payments on the distribution of income: A parametric comparison

The Luxembourg Income Study data is used to explore the impact of taxes and transfer payments on the distribution of income across 13 countries for different years. The five-parameter generalized beta distribution and 10 of its special cases are considered as models for the size distribution of income. Maximum likelihood methods are used to estimate the model with corresponding measures of goodness of fit and inequality reported. These results identify the best-fitting two-, three-, and four-parameter models as well as describe the inter-temporal patterns of inequality corresponding to earnings, total income, and disposable income. A general pattern of increasing inequality is observed for almost all countries considered along with significantly different distributional impacts of taxes and transfer payments across countries.