1. LWS and LIS Income Variables, Income from Wealth and Income from Labor, an Exploratory Analysis
Emilia Niskanen and Timothy Smeeding, Luxembourg Income Study
LWS Final Conference in Rome, July 5-7, 2007

2. Outline I. LWS INCOME CONCEPTS II. LWS AND INCOME NET WORTH
III. NEXT STEPS

3. LWS Income Variables LIS concepts Canberra Group Simplicity Coverage
See:

4. Household variables

5. Summary Income Variables

7. II. INCOME FROM LABOR VS. INCOME FROM WEALTH

8. 1. Incomplete LWS income measures: Simplification of Definitions

9. 2. More complete: Full Income or Income Net Worth
Haig-Simons Income: Consumption Plus Change Net Worth
Income types:
Labor Income
Self-employment Income
Income from Capital
Taxes and Transfers

10. 3. What to do about it?
GIW
AGI = GIW minus ‘reported’ capital income (CPRI)
FGI1 = AGI plus 2 percent ‘real’ return
FGI2 = AGI plus 4 percent ‘real’ return

12. 4. Methods Countries: Net Worth 1 vs. New Worth 2 Top codes (not yet)
Canada 1998
Finland 1998
Germany 2001
Italy 2002 (NET)
Sweden 2002
The U.S. 2000
Net Worth 1 vs. New Worth 2
Top codes (not yet)

13. 5. Preliminary “Test” Results

19. 6. Discussion Finland vs. The U.S. Quality of Data
Quality of Assumptions
Effect on Rank Ordering of Nations, e.g. 90/10 or Gini Ratios, GIW vs FGI2

20. III. NEXT STEPS 1. EXPLORE THE DIFFERENCES FURTHER BY AGE, FAMILY TYPE
2. IMPROVE VALUE OF INCOME FROM WEALTH COMPONENTS
3. TOP CODE WEALTH AT 99 % PERCENTILE

21. IV. COMMENTS AND DISCUSSION, PLEASE?

22. THANK YOU!