1. WORK OF THE OECD EXPERT GROUP ON DISPARITIES IN NATIONAL ACCOUNTS Jorrit Zwijnenburg National Accounts Division OECD Advisory Expert Group on National Accounts Paris, France, April 13 – 15, 2016

2. Background Aim of the project Methodology Results from a recent exercise Work on nowcasting Way forward 2 Contents

3. Stiglitz, Sen, Fitoussi report (2009): More focus on households to better measure people’s well-being, amongst others by putting more focus on distributional aspects 2011: Launch of OECD/Eurostat Expert Group on Disparities in National Account (EG DNA) to develop methodology to produce distributional results consistent with national accounts concepts using micro data sources 2013: Publication of results from a first exercise 2014: Continuation of the work by an OECD EG DNA to further improve methodology and timeliness 2015: Second exercise on basis of improved methodology 3 Background

4. Aim of the project Aim: Develop methodology to produce distributional results for household income, consumption and saving consistent with national accounts concepts using micro data sources MICRO DATA Micro concepts -> Distribution MACRO DATA Macro concepts -> Totals, growth Q1 Q3 Q4 Q2 Q5 Household groups

5. 5 Methodology: Step-by-step procedure Step 1 – Adjust national accounts totals (exclude NPISHs, expenditures of non-resident hh’s and people living in non- private dwellings) Step 2 – Identify relevant variables from micro data sources that could be matched to NA variables (different data sources may be used for the various income an consumption items) Step 3 – Impute missing elements and scale the micro data to the adjusted national accounts totals ( e.g. imputation for STiK, FISIM, income attributable to policy holders ) Step 4 – Cluster households into groups (on the basis of equivalized disposable income) Step 5 – Derive relevant indicators for household groups (e.g. ratio to the average, highest to lowest)

6. Distributional results for three household groupings: Disposable income quintile (5 groups) Main source of income (4 groups) (optional) Household type (8 groups) (optional) Calculations performed by members of the EG DNA: AUS, AUT, CHE, FRA, GBR, ISR, JPN, MEX, NLD, PRT, SVN, SWE, USA Most recent year: 2012 6 Results from the recent exercise

7. 7 Results from the recent exercise: Ratio to average

8. Results from the recent exercise: Ratio of highest to lowest income 8

9. 9 Results from the recent exercise: Savings ratios Mexico France Israel

10. Results look encouraging! Results from both exercises look consistent and plausible Results provide interesting insights Some countries are already planning to publish results However … Longer time series are needed to check robustness Further research is needed into micro-macro gaps 10 Main conclusions from exercise

11. 11 Challenge of micro-macro gaps

12. There is a strong demand for recent data However, the timeliness of micro data sources is often poor Looking for nowcasting techniques to compile timely data: Top-down Bottom-up Meso For the time being, focus on top-down approach due to data availability Various methods tested (t-1, average, regression against trend and totals) 12 Nowcasting exercise

13. Preliminary results show relatively good results when it comes to the shares of the various groupings Larger gaps observable looking at changes and growth rates Further research is needed to understand results and to improve methodology Limited availability of data limits the current analyses Larger availability of countries and time series would be very helpful! Also data would be welcome to test the micro and meso approaches Paper with nowcasting results is sent to the EG DNA with an accompanying request to provide additional data, whenever available 13 Main findings regarding nowcasting

14. Working paper on results of the second exercise will be published in summer 2016 Further improve methodology Providing guidance on how to deal with micro-macro gaps Explore how countries currently link data from various surveys Finding a way to combine and publish all knowledge and experience Set up a regular data collection from countries, possibly extending coverage with own estimates Further explore nowcast methodologies Extending the exercise to distribution of wealth Next meeting of the EG DNA in the fall of 2016 14 Way forward for EG DNA

15. Thank you for your attention 15 For more information please contact: Jorrit.Zwijnenburg@oecd.org Jorrit.Zwijnenburg@oecd.org