Functional and personal income distribution in the Baltics: comparison of national and households accounts

Abstract

In this paper we aim to cover the gap in analysis of functional distribution of National income at the macroeconomic level and personal income distribution at the microlevel. We compare the information provided in the National Accounts and in the EU Survey on Income and Living Conditions (EU-SILC) for the three Baltic states and in a wider EU context to establish the links between the economic prosperity at the macro level and income distribution at individual level. Comparative design helps identify differences in income structure and inequality within similar socio-economic conditions. As demonstrated, similar levels of per capita disposable incomes in the National Accounts in the Baltics hide higher levels of income inequality than conventionally shown in the EU-SILC. This is to a large degree due to high level of under-reporting of property income and is most acute for Lithuania.