Inequalities between households in the national accounts: Breakdown of household accounts

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Inequalities between households in the national
accounts Breakdown of household accounts
Maryse FESSEAU France Insee National Accounts
Department
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Reconciling macro-economic figures and publics
perception

• Moati P., Rochefort R.  measuring purchasing
  power , Conseil dAnalyse Economique Report to
  PM - 2008
• Quinet A.   measuring households purchasing
  power  , Report to Minister of Finance - 2008
•  Stiglitz  commission on the  measurement  of
  economic performance and social progress 
• recommandation breaking down macro-economic
  figures to take into account disparities between
  households
• Beginning of the project mid-2007
• First published results mid-2009

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Two different worlds micro and macro data

• Income and consumption two types of information
  available
• Building a bridge between these two approaches to
  break down households account by household
  categories

• Households account
• (MACRO SOURCE)
•  mirror  construction
• exhaustiveness
• harmonised framework

• Households surveys
• (MICRO SOURCE)
• direct information
• specific surveys
• individual information

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Presentation in three parts

• 1. Breakdown of household accounts using surveys
  scope, classification and methodology
• 2. Results published disposable income,
  consumption expenditure and savings rate by
  household categories
• 3. A new step adjusted disposable income and
  actual consumption by household categories

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• Part 1

Breakdown of household accounts using surveys
scope, classification and methodology
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Breakdown of ordinary household accounts for the
year 2003 using five surveys (1/3)

• The framework of analyses national accounts,
  2003
• A breakdown using five surveys, for ordinary
  households mainland France
• 4 classification variables standard of living,
  household composition, employment status or age
  of the head of the household

Source National accounts 2003 Base 2000, Insee
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Breakdown of ordinary household accounts for the
year 2003 using five surveys (2/3)

• Comparison of estimates coming from different
  data sources
• Some imputations on micro data (imputed rents,
  financial revenues, public education
  expenditure,)

Source Insee, National accounts 2003, SILC 2004,
Tax income 2003 and calculations by the authors.
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Breakdown of ordinary household accounts for the
year 2003 using five surveys (3/3)

• Breakdown for each component of incomes and
  consumption, using distribution coming from micro
  data and benchmarking aggregates on national
  account figures
• -gt Wages and salaries by age of the head of the
  household

Source Insee, National accounts 2003, SILC 2004,
Employment survey 2003, housing satellite account
2003 and calculations by the authors.
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• Part 2

Results published disposable income,
consumption expenditure and savings rate by
household categories
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Results according to standard of living

• Standard of living defined as income level per
  consumption unit (CU)
• Households distributed in five equal groups on an
  increasing scale
• Disposable income of the most well-off households
  is five times higher than that of the least
  well-off

Scope ordinary households resident in mainland
France, excl. Fisim. Source  Insee, national
account 2003, SILC2004, Tax Income 2003,
Household Budget 2006, housing and health
surveys, calculations by the authors.
Q5/Q1 5.0
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The 20 richest households receive 40 of the
total amount of disposable income
Index 100 for disposable income
78.7 B
130.3 B
159.2 B
218.0 B
397.3 B
993.4 B

• Scope ordinary households resident in mainland
  France, excl. Fisim.
• Source  Insee, national account 2003, SILC2004,
  Tax Income 2003, Household Budget 2006, housing
  and health surveys, calculations by the authors.

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Ratio Q5/Q1 lower on average consumption
expenditure than on disposable income
Consumption expenditure by standard of living
quintile in 2003
Scope ordinary households resident in mainland
France, excl. Fisim. Source  Insee, national
account 2003, SILC2004, Tax Income 2003,
Household Budget 2006, housing and health
surveys, calculations by the authors.
Q5/Q1 3.3
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The savings rate increases with income level,
negative on average for the poorest
Savings, in of disposable income
Average savings rate 17
Scope ordinary households resident in mainland
France, excl. Fisim. Source  Insee, national
account 2003, SILC2004, Tax Income 2003,
Household Budget 2006, housing and health
surveys, calculations by the authors.
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The youngest and single-parent families benefit
from private transfers between households
Savings rate
Before private transfers
After private transfers
Scope ordinary households resident in mainland
France, excl. Fisim. Source  Insee, national
account 2003, SILC2004, Tax Income 2003,
Household Budget 2006, housing and health
surveys, calculations by the authors.
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• Part 3
• A new step to measure how social transfers in
  kind reduce inequalities adjusted disposable
  income and actual consumption by household
  categories

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Main components of social transfers in kind

• Transfers in kind for ordinary households in 2003
  
• 229,5 billions of
• 9 100 per household
• 5 800 per consumption unit (CU)
• Health care reimboursements and education
  represent the three quarters of transfers in
  kind

Source national accounts Base 2000
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Social transfers in kind reduce inequalities
.

• From 5.0 to 3.2 regarding adjusted disposable
  income
• From 3.3 to 2.2 regarding actual consumption

Adjusted disposable income by standard of living
quintile in 2003
Actual consumption by standard of living quintile
in 2003
Scope ordinary households resident in mainland
France, excl. Fisim. Source  Insee, national
account 2003, SILC2004, Tax Income 2003,
Household Budget 2006, housing and health
surveys, calculations by the authors.
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Redistribution in the national accounts framework
Primary income (incomes from economic activity
and assets) (1)
Contributions and taxes (2)
Benefits and other transfers in cash (3)
Redistribution
Disposable income (4) (1) - (2) (3)
Social transfers in kind (5)
Adjusted disposable income (6) (4)(5)
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A picture of redistribution the least well-off
are the main beneficiaries
Transfers in of primary income
Scope ordinary households resident in mainland
France, excl. Fisim. Source  Insee, national
account 2003, SILC2004, Tax Income 2003,
Household Budget 2006, housing and health
surveys, calculations by the authors.
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The health care expenses are the highest part of
social transfers in kind but the education
expenses are a bit more discriminating
Income agregates distribution according to
standard of living quintile in 2003
In (All households 100)
Scope ordinary households resident in mainland
France, excl. Fisim. Source  Insee, national
account 2003, SILC2004, Tax Income 2003,
Household Budget 2006, housing and health
surveys, calculations by the authors.
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For the poorest, health care and education
represent a third of actual consumption
Make-up of consumption expenditure (CE) vs actual
consumption (AC) in 2003
Q1
Q5
All households
Scope ordinary households resident in mainland
France, excl. Fisim. Source  Insee, national
account 2003, SILC2004, Tax Income 2003,
Household Budget 2006, housing and health
surveys, calculations by the authors.
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Social transfers in kind have a key role for the
oldest and for large families

• Health care 43 of transfers in kind
• ..but 78 for the oldest (70 or more)
• and 69 for families where the head of the
  household is between 60 and 69
• Education 33 of transfers in kind
• ..but 61 for the largest families
• 52 for families with two children
• 48 for single parent families

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Conclusions

• Micro data bridged with national account data on
  household income and consumption
• Main conclusions
• Financial income and savings highly concentrated
  on the top of the distribution
• Some categories of households with low level of
  income have, on average, negative savings but
  they are the main beneficiaries of social
  transfers in kind
• For the poorest, health care is the second item
  in actual consumption
• Next steps patrimony, purchasing power

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• Thanks for your attention.
• Results and publications can be found at
• In french http//www.insee.fr/fr/themes/comptes-n
  ationaux/souschapitre.asp?id72
• In english http//www.insee.fr/en/themes/theme
  .asp?theme16