1. Inequalities between households in the national accounts: Breakdown of household accounts Maryse FESSEAU France – Insee National Accounts Department

2. Page 2 Inequalities between households in the national accountsInsee2009, November 6 Reconciling macro-economic figures and publics perception Moati P., Rochefort R. « measuring purchasing power », Conseil dAnalyse Economique – Report to PM - 2008 Quinet A. « measuring households purchasing power », Report to Minister of Finance - 2008 « Stiglitz » commission on the « measurement of economic performance and social progress » recommandation : breaking down macro-economic figures to take into account disparities between households Beginning of the project : mid-2007 First published results : mid-2009

3. Page 3 Inequalities between households in the national accountsInsee2009, November 6 Two different worlds : micro and macro data Income and consumption : two types of information available Building a bridge between these two approaches to break down households account by household categories Households account (MACRO SOURCE) - « mirror » construction - exhaustiveness - harmonised framework Households surveys (MICRO SOURCE) - direct information - specific surveys - individual information

4. Page 4 Inequalities between households in the national accountsInsee2009, November 6 Presentation in three parts : 1. Breakdown of household accounts using surveys : scope, classification and methodology 2. Results published : disposable income, consumption expenditure and savings rate by household categories 3. A new step : adjusted disposable income and actual consumption by household categories

5. Page 5 Inequalities between households in the national accountsInsee2009, November 6 Part 1: Breakdown of household accounts using surveys : scope, classification and methodology

6. Page 6 Inequalities between households in the national accountsInsee2009, November 6 The framework of analyses : national accounts, 2003 A breakdown using five surveys, for ordinary households – mainland France 4 classification variables : standard of living, household composition, employment status or age of the head of the household Breakdown of ordinary household accounts for the year 2003 using five surveys (1/3) Source: National accounts 2003 – Base 2000, Insee

7. Page 7 Inequalities between households in the national accountsInsee2009, November 6 Comparison of estimates coming from different data sources Some imputations on micro data (imputed rents, financial revenues, public education expenditure,…) Breakdown of ordinary household accounts for the year 2003 using five surveys (2/3) Source: Insee, National accounts 2003, SILC 2004, Tax income 2003 and calculations by the authors.

8. Page 8 Inequalities between households in the national accountsInsee2009, November 6 Breakdown of ordinary household accounts for the year 2003 using five surveys (3/3) Breakdown for each component of incomes and consumption, using distribution coming from micro data and benchmarking aggregates on national account figures -> Wages and salaries by age of the head of the household: Source: Insee, National accounts 2003, SILC 2004, Employment survey 2003, housing satellite account 2003 and calculations by the authors.

9. Page 9 Inequalities between households in the national accountsInsee2009, November 6 Part 2: Results published : disposable income, consumption expenditure and savings rate by household categories

10. Page 10 Inequalities between households in the national accountsInsee2009, November 6 Results according to standard of living Standard of living defined as income level per consumption unit (CU) Households distributed in five equal groups on an increasing scale Disposable income of the most well-off households is five times higher than that of the least well-off Scope : ordinary households resident in mainland France, excl. Fisim. Source : Insee, national account 2003, SILC2004, Tax Income 2003, Household Budget 2006, housing and health surveys, calculations by the authors. Q5/Q1 = 5.0

11. Page 11 Inequalities between households in the national accountsInsee2009, November 6 The 20% richest households receive 40 % of the total amount of disposable income Scope : ordinary households resident in mainland France, excl. Fisim. Source : Insee, national account 2003, SILC2004, Tax Income 2003, Household Budget 2006, housing and health surveys, calculations by the authors. Index 100 for disposable income 78.7 B130.3 B159.2 B218.0 B397.3 B993.4 B

12. Page 12 Inequalities between households in the national accountsInsee2009, November 6 Ratio Q5/Q1 lower on average consumption expenditure than on disposable income Consumption expenditure by standard of living quintile in 2003 Scope : ordinary households resident in mainland France, excl. Fisim. Source : Insee, national account 2003, SILC2004, Tax Income 2003, Household Budget 2006, housing and health surveys, calculations by the authors. Q5/Q1 = 3.3

13. Page 13 Inequalities between households in the national accountsInsee2009, November 6 The savings rate increases with income level, negative on average for the poorest Average savings rate : 17 % Scope : ordinary households resident in mainland France, excl. Fisim. Source : Insee, national account 2003, SILC2004, Tax Income 2003, Household Budget 2006, housing and health surveys, calculations by the authors. Savings, in % of disposable income

14. Page 14 Inequalities between households in the national accountsInsee2009, November 6 The youngest and single-parent families benefit from private transfers between households Before private transfers After private transfers Savings rate : Scope : ordinary households resident in mainland France, excl. Fisim. Source : Insee, national account 2003, SILC2004, Tax Income 2003, Household Budget 2006, housing and health surveys, calculations by the authors.

15. Page 15 Inequalities between households in the national accountsInsee2009, November 6 Part 3: A new step to measure how social transfers in kind reduce inequalities : adjusted disposable income and actual consumption by household categories

16. Page 16 Inequalities between households in the national accountsInsee2009, November 6 Main components of social transfers in kind Transfers in kind for ordinary households in 2003 –229,5 billions of –9 100 per household –5 800 per consumption unit (CU) Health care reimboursements and education represent the three quarters of transfers in kind; Source :national accounts – Base 2000

17. Page 17 Inequalities between households in the national accountsInsee2009, November 6 From 5.0 to 3.2 regarding adjusted disposable income From 3.3 to 2.2 regarding actual consumption Social transfers in kind reduce inequalities Adjusted disposable income by standard of living quintile in 2003 Scope: ordinary households resident in mainland France, excl. Fisim. Source : Insee, national account 2003, SILC2004, Tax Income 2003, Household Budget 2006, housing and health surveys, calculations by the authors.. Actual consumption by standard of living quintile in 2003

18. Page 18 Inequalities between households in the national accountsInsee2009, November 6 Redistribution in the national accounts framework Primary income (incomes from economic activity and assets) (1) Contributions and taxes (2) Benefits and other transfers in cash (3) Disposable income (4) = (1) - (2) + (3) Social transfers in kind (5) Adjusted disposable income (6) = (4)+(5) Redistribution

19. Page 19 Inequalities between households in the national accountsInsee2009, November 6 A picture of redistribution : the least well-off are the main beneficiaries Scope: ordinary households resident in mainland France, excl. Fisim. Source : Insee, national account 2003, SILC2004, Tax Income 2003, Household Budget 2006, housing and health surveys, calculations by the authors. Transfers in % of primary income

20. Page 20 Inequalities between households in the national accountsInsee2009, November 6 The health care expenses are the highest part of social transfers in kind but the education expenses are a bit more discriminating: Scope: ordinary households resident in mainland France, excl. Fisim. Source : Insee, national account 2003, SILC2004, Tax Income 2003, Household Budget 2006, housing and health surveys, calculations by the authors. Income agregates distribution according to standard of living quintile in 2003 In % (All households = 100)

21. Page 21 Inequalities between households in the national accountsInsee2009, November 6 For the poorest, health care and education represent a third of actual consumption Scope: ordinary households resident in mainland France, excl. Fisim. Source : Insee, national account 2003, SILC2004, Tax Income 2003, Household Budget 2006, housing and health surveys, calculations by the authors. Q1Q5All households Make-up of consumption expenditure (CE) vs actual consumption (AC) in 2003

22. Page 22 Inequalities between households in the national accountsInsee2009, November 6 Social transfers in kind have a key role for the oldest and for large families Health care : 43% of transfers in kind..but 78% for the oldest (70 or more) and 69% for families where the head of the household is between 60 and 69 Education : 33% of transfers in kind..but 61% for the largest families 52% for families with two children 48% for single parent families

23. Page 23 Inequalities between households in the national accountsInsee2009, November 6 Conclusions Micro data bridged with national account data on household income and consumption Main conclusions : –Financial income and savings highly concentrated on the top of the distribution –Some categories of households with low level of income have, on average, negative savings but they are the main beneficiaries of social transfers in kind –For the poorest, health care is the second item in actual consumption Next steps : patrimony, purchasing power

24. Page 24 Inequalities between households in the national accountsInsee2009, November 6 Thanks for your attention. Results and publications can be found at : In french: http://www.insee.fr/fr/themes/comptes- nationaux/souschapitre.asp?id=72http://www.insee.fr/fr/themes/comptes- nationaux/souschapitre.asp?id=72 In english: http://www.insee.fr/en/themes/theme.asp?theme=16 http://www.insee.fr/en/themes/theme.asp?theme=16