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Income and Wealth

The questions concerning income and wealth deal with interrelations and connections between these two factors. How does one get rich and which role does capital income play in this scenario?

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Until recent years, research in this field focused on a generalized view of the subject, since the data situation in Austria is rather complicated. The income distribution is comparatively egalitarian, whereas the distribution of wealth can be characterized as heavily concentrated. A significant concentration of capital income results from these circumstances; the “classic social classes” are less important in this respect, greater importance is attached to the conflict between “top 1%” vs. “bottom 99%”.

Capital income

Capital income is not included in official statistics (due to the Austrian closing-tax design), but the Household Finance and Consumption Survey (HFCS) 2010 enables an analysis of micro data for the first time in history. Key findings are:

  • This type of income is not important for the bottom 95%

  • Beyond the 95%, the importance of income from stocks and rents rises

  • The top 1% receives one third of all capital incomes

European elites

Which countries host the top 1%? How did they get to the top: work or inheritance? Does income from a certain wealth category increase the possibility of getting to the top of the wealth distribution? How does the top 1% differ from the rest of the distribution with respect to socio-economic characteristics such as:

  • Education

  • household structure

  • distribution of earnings

  • and age

Joint distribution

Employees vs. capitalists? A comparison between ranks in income and wealth distribution is made. Clustering on both ends of the distributions occurs: poor-poor and rich-rich; there is a significant number of households with high income levels but hardly any wealth. Wealth is probably a better performance indicator than income.

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