Recent Developments in Danish Inequality

This paper is based on Danish register data describing individual-level income between 1984 and 2016 and argues that whether focusing on the cross-sectional or panel data dimension matters crucially for the resulting growth statistics. When investigating the cross-sectional dimension - as most international studies are usually limited by their data to do - the analysis shows that real incomes have increased by far more for the top parts of the distributions. When instead utilizing the panel dimension t h e pattern is reversed, such that it is the individuals who h ad the lowest incomes in 1984, who are the ones that experienced the highest income growth rates during the 32-year period. Together the two analyses compliment each other and offer important information for policymakers, as they suggest that although inequality has increased between 1984 and 2016 a person's relative placement in the income distribution may not persist throughout his lifetime.