Distributional National Accounts of Taiwan, 1981-2017

• Published in: Jing ji lun wen cong kan Vol. 51; no. 2; pp. 137 - 181
• Main Authors: Chu, Cyrus, Chen, Chien-Yu, Lin, Ming-Jen, Su, Hsuan-Li
• Format: Journal Article
• Language: Chinese; English
• Published: Taipei 臺灣大學經濟學系 01.06.2023; Taiwan Economic Review
• Subjects: Economic growth; Estimates; Family income; GDP; Gross Domestic Product; Growth rate; Households; Income distribution; Income inequality; Income taxes; Retained earnings; Taxable income; Taiwan; 國民所得分配帳; 所得不均; income inequality; pre-tax national income; distributional national accounts; 稅前國民所得
• ISSN: 1018-3833
• DOI: 10.6277/TER.202304_51(2).0001

We construct the pre-tax Distributional National Accounts (DINA) of Taiwan from 1981 to 2017 using survey data. Our DINA individual income series demonstrates a much larger inequality than previous results using tax tabulations and tax units. This difference is mainly due to a change in the unit of observation and the treatment of corporate retained earnings. We find that income inequality was stable in the 1980s and began to rise after the mid-1990s. After 2000, this trend further accelerated. We then estimate the distribution of economic growth. From 1981 to 2001, Taiwan experienced a period of rapid economic growth, with a growth rate of 7.32 percent annually and a fairly equal distribution of growth. From 2001 to 2017, the aggregate growth rate declined to 2.47 percent with a deteriorating distribution of growth. The increasing inequality in income and growth distribution is due to the combination of a worsening capital income distribution and rising retained earnings.