Page 96 - Invited Paper Session (IPS) - Volume 1

IPS102 Arjan B.

A complete measure of wealth and wealth
inequality
Arjan Bruil
Statistics Netherlands

Abstract
In the past years, linking micro data to macro aggregates of the system of
national accounts (SNA) received a lot of attention. Most efforts focused on
adding distributions of income and consumption to macro aggregates of the
household sector. In this article, we will include the wealth dimension as well. In
measures of wealth inequality, often pension entitlements are not included. In
the Dutch System of National Accounts however, these are the largest asset of
households. These entitlements relate to work-related and voluntary pensions,
but exclude public pensions. Recently, estimates of household pension wealth
are extended with implicit pension wealth. This is the result of ongoing efforts
to make pension systems more comparable over countries. In this article, we will
show the leveling effects of the pension schemes, and compare the new wealth
measures with income inequality in the Netherlands.

Keywords
distributions; national accounts; net worth; pension entitlements

1. Introduction
Studies on inequality have long focused on income. There is ample data
available to construct long time series, with a great level of detail. For wealth,
the data availability is less abundant. When wealth inequality is considered (for
example: OECD, 2015), these often cover the micro statistics. In recent years,
micro data are linked more and more to National Accounts totals. The biggest
difference between micro and macro concepts of wealth is whether pension
entitlements are included. In the Netherlands, these are the largest financial
asset of the household sector in the System of National Accounts (SNA),
amounting to 205% of GDP in 2016. The public pension schemes are not
1
included in the net worth of the SNA . The micro statistics exclude both work-
related and public pension schemes from the assets. There might be reasons
to neglect pension entitlements, as they differ from other wealth components
such as bank savings or equity. Pension entitlements are not freely accessible
and households cannot bequeath it. However, in lifecycle terms, it is by design
a means of future consumption. Apart from this conceptual discussion,

1 Since the most recent SNA update (2008), the public pension plans are measured in a
supplementary pension table, as if they were funded.
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