The Components of Income Inequality in Belgium : Applying the Shorrocks-Decomposition with Bootstrapping

We look at the contribution of various income components on income inequality and the changes in this in Belgium.Starting from the Shorrocks decomposition, we apply bootstrapping to construct confidence intervals for both the annual decomposition and the changes over time.It appears that the redistributive impact of the Belgian social security system did not become smaller in an absolute sense between 1985 and 1997, but - due to the large increase in labour income inequality - only in a proportional sense.