Who are the rich? The evolution of the socioeconomic and demographic structures of the top incomes in Finland from 1987–2015

Roosa Sandell & Mikko Niemelä

 

Abstract

 

It has been acknowledged that the growth in income inequality since the 1980s has occurred due to the rich becoming even richer in many Western societies. To understand the mechanisms of the growth in income inequality, the article examines the evolution of the socioeconomic and demographic structures of the top incomes in Finland. The study explores changes in the highest income decile’s socioeconomic and demographic structures and changes in the internal dispersion of the rich. The empirical analysis is based on time-series data from the Finnish Income Distribution Statistics (IDS) covering the period from 1987–2015 (N=306 257). Our main results show that the highest income decile became more heterogeneous during the period from 1987–2015 in terms of incomes and demographic and socioeconomic factors. In addition, most fluctuations in incomes and demographic and socioeconomic factors in the highest income decile were due to fluctuations within the top 1%, and these fluctuations increased from 1987–2015. Last, the number of entrepreneurs among the top incomes increased from 1987–2015, whereas the number of upper-level employees decreased.

 

Key words: demographics, income inequality, internal dispersion, top incomes, the rich

 

Download PDF