Economic Growth from the Household Perspective

This paper provides an assessment of how households’ income has fared compared withGDP. While the prime focus is on incomes around the median, attention is paid also to the bottom of theincome distribution. Thus, one contribution of the paper is to deliver a fresh assessment of the evolution ofinequality and poverty across OECD countries over the last fifteen years. The analysis relies on a rich arrayof indicators, producing new evidence of the various patterns of differences in income distributions acrosscountries and over time. For example, it assesses the extent to which stability in overall income inequalitymasks compensating changes between the lower and upper halves of the income distribution. Also, itexplores whether contracting inequalities coexist with increasing poverty. The paper adds to previousstudies by introducing, measuring and analysing income polarisation in a cross-country comparativeperspective. Distinguishing polarisation from inequality and comparing their evolution over time providesnew policy-relevant perspectives on the nature of the changing income distribution.