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Income Inequality from Kuznets Perspective

Summary

  • Analyzing the development of income inequality in Switzerland over the last 50 years we found no striking shift of income inequality. Although huge changes of the economic structure occurred. However, a relatively steep increase in the last decade could be observed.
  • Looking at regional distribution of income, it becomes visible that wealth is concentrated in urban areas (Zürich, Geneva, Bern, Basel), where inequality is relatively high. While cities indeed have a high share of tertiary economic employees, this is true for alpine areas (tourism) as well. The communities with highest income inequality can be found in the alps, around geneva and in Schwyz/Zug.
  • Examining income by branches and sectors reveals that income in the tertiary sector differ strongly. IT-Workers have the highest income while cleaners are relatively poor.
  • Regression analysis finally shows that communities with a high share of tertiary sector tend to be more unequal (between effect). A change of tertiary sector share within a community however only has a minor effect, which also varies over time. 1995, an increase of tertiary sector workers led to a decrease of inequality. This effect shifts to a positive one over time (interaction).