Inequality Trends in the Swiss Income Distribution

As in many countries income inequality in Switzerland has increased between the early 1980s and the early 1990s. This paper applies decomposition methods in order to identify potential causes for this increase. The decomposition is performed by a) population subgroups and b) income sources. Our results indicate that demographic shifts can only account for a minor fraction of the overall change. The decomposition by income sources provides a clearer picture. The main contributing factors to the increase in overall inequality are the household head's labour earnings and household wealth income.