Towards a System of Distributional National Accounts

Project Information

DINA

Grant agreement ID: 856455

DOI

10.3030/856455

EC signature date 26 February 2020

Start date 1 March 2020

End date 28 February 2027

Funded under

• EXCELLENT SCIENCE - European Research Council (ERC)

Total cost

€ 9 813 903,00

EU contribution

€ 9 813 903,00

Coordinated by

ECOLE D'ECONOMIE DE PARIS
France

Periodic Reporting for period 3 - DINA (Towards a System of Distributional National Accounts)

Reporting period: 2023-03-01 to 2024-08-31

Summary of the context and overall objectives of the project

A renovated approach to the measurement of economic inequality consistent with macro aggregates should rebuild the bridges between distributional data available from micro sources and series available from national accounts. This is the main goal pursued through DINA-Distributional National Accounts. The aim is to provide annual estimates of the distribution of income and wealth using concepts that are consistent with the macroeconomic national accounts, done in a critical way, that is, by establishing in detail and case by case where and when this is feasible, and, when not feasible yet, assess the reasons and limitations of the data and propose strategies to improve the current production of socioeconomic statistics. This endeavour involves the production of synthetic micro-files (i.e. individual level data that are not necessarily the result of direct observation but rather through estimations that reproduce the observed distribution of the underlying data, including the joint distribution of age, gender, numbers of dependent children, income and wealth between adult individuals) providing information on income and wealth, which will also be made available online. The global aim is to release income and wealth synthetic DINA micro-files an annual basis. Such data will certainly play a critical role in the public debate, and will be used as a resource for further analysis by various actors in the academic, business and political communities.
All the data generated by the project is stored and published in
www.wid.world (The World Inequality Database). The database is open access.
As challenging as it can be, we cannot stop at the mere production of statistical DINA series and their methodological guidelines. The new series should provide new bases for analysis and should give rise to new new answers to old questions, as well as the possibility to tackle new questions on:
-The taxation of income and wealth, and its impact on accumulation and growth, all requiring a critical reassessment of the concepts of inequality, capital, wealth, and accumulation, all rooted in Political Economy;
-The relative importance of primary vs. secondary government redistribution;
-The impact of regional economic and political unions on inequality dynamics between and within countries;
-The evolution of the gender gap and the family structure in connection with income and wealth.
-The joint distributions of income-wealth-age-gender.
-The changing global distribution of income-wealth and environmental challenges

Work performed from the beginning of the project to the end of the period covered by the report and main results achieved so far

During the first four years, the project

- produced 149 publications: papers in refereed academic journals, working papers, technical notes, books, chapters in books, and a report (World Inequality Report 2022)
- organized a major conference: World Inequality Conference 2022, hosted by the Paris School of Economics on December 7th and 8th, 2021.
https://wid.world/news-article/world-inequality-conference-2021-platform-published-on-line/
The conference was structured along three axes: (i) Presentations of research on all dimensions of socioeconomic inequality; (ii) The releasing of the World Inequality Report 2022, which provides global estimates of income and wealth inequality drawing on the latest evidence gathered in WID.world and discusses implications for future research and for the global policy debate on rising inequality; and (iii) Presentations on progress made in the DINA-Distributional National Accounts agenda. The conference was hybrid. 300 submissions were received, out of which one third was accepted for inclusion in the program. Members of the three teams from Oxford, Berkeley and Paris actively participated in the conference.
- updated the publication “Distributional National Accounts Guidelines. Methods and Concepts Used in WID.world.” The first version had been published as WID.world WP 2016/2 (before the beginning of the project); an updated version was published in 2020; a subsequent update was published in 2021 and in 2024 (all updates during the project). The guidelines provide the general framework of the proposed Distributional National Accounts.
-updated and feed the World Inequality Database WID.world accessible at https://wid.world
The World Inequality Database (WID.world) aims to provide open and convenient access to an most extensive available database on the historical evolution of the world distribution of income and wealth, both within countries and between countries. It stores all the data and series produced according to the DINA-Distributional National Accounts methodology.
The World Inequality Database (WID.world) aims to provide open and convenient access to the most extensive available database on the historical evolution of the world distribution of income and wealth, both within countries and between countries. It stores all the data and series produced according to the DINA-Distributional National Accounts methodology. Updates of global inequality data for over 170 countries were released, making up 97% of the world population and 7.5 billion people. The data distributes economic growth within each country making it possible to track inequality over time, countries and regions, along the Distributional National Accounts proposal. These has been achieved thanks to the grant team and the international network of researchers that cooperates with us.
-created the Realtime Inequality website, accessible at: https://realtimeinequality.org focused on the distribution of income and wealth in the United States
Realtime Inequality provides the first timely statistics on how economic growth is distributed across groups in the United States. When new growth numbers come out each quarter, we show how each income and wealth group benefits in the United States.
-started or continued scientific cooperation with a number of official institutions for the production and improvement of the measurement of inequality and other social indicators in developing countries, including Distributional National Accounts: United Nations Development Programme, United Nations Economic Commission for Latin America and the Caribbean, the European Union, the French Agency for Development, the Institute of Statistics of France, the Institute of Statistics of Dominican Republic.
-participated in more than sixty dissemination activities over the reporting period 2022-2023.

Progress beyond the state of the art and expected potential impact (including the socio-economic impact and the wider societal implications of the project so far)

The development of DINA-distributional national accounts represents substantial progress beyond the state of the art. By attempting to provide a general, unified framework to measure inequality, and a reconciliation of inequality studies with national accounts aggregates, we seek to address four problems.
- First and most important, there is a large gap between national accounts (NA) —which focus on macro totals and growth— and inequality studies —which focus on distributions using survey and tax data, usually without trying to be fully consistent with macro totals.
- Second, about a substantial fraction of national income is redistributed through taxes, transfers, and public spending on goods and services such as education, police, and defence. Yet we did not have a comprehensive measure of how the distribution of pre-tax income differs from the distribution of post-tax income, making it hard to assess how government redistribution affects inequality.
-Third, the move from national states considerations to the study of inequality at the regional and global level requires an acceptable level of homogeneity of statistics across countries. So far, with the available data, it was not even possible today to analyze the distribution of income in regional blocks such as the European Union taking into account the information from all the member states, as the statistics are not fully compatible and cannot be aggregated simply across countries. These limitations also apply to provinces within a country.
-Finally, the Distributional National Accounts agenda imposes on us the obligation to re-assess the understanding of the key concepts of income, wealth and capital, rooted in Political Economy. Even when an acceptable reconciliation across data sources is reached, the discussion about the definition of income that should be considered for welfare evaluation purposes remains, and the DINA agenda must also contribute to the debate at the conceptual and theoretical level.