Issue, No.26 (June 2023)

Highlights of the LIS 40thAnniversary Conference (May 25th-26th 2023)

by Taylor Kroezen (LIS)

The Anniversary Conference to celebrate 40 years of the Luxembourg Income Study took place on May 26th 2023 at Campus Kirchberg following the Anniversary Lecture in Bourglinster Castle on the 25th of May 2023.

The 40 years of LIS festivities kicked off with the Anniversary Lecture given by Richard Blundell from the University College London. In his address Richard Blundell explored the past 40 years of income survey data, and using four country examples he focused on economic inequalities over the working life to shed light on some major innovations in data collection and changes to the range of available data over the decades. He discussed innovations in linking data (administrative, registers and household survey panels), and the importance of continuing this effort of building linkages across data on income, wealth and consumption. He also emphasized the exciting new directions and measurement approaches made possible through incorporating consumption data with income and wealth for 3-dimensional measures of inequality and poverty.

Richard Blundell giving the 40th Anniversary Lecture.

The following day, the Anniversary Conference was opened with welcoming remarks by Mr. Claude Meisch, the Minister of Higher Education and Research in Luxembourg, who applauded the success story of LIS over the past 40 years by enabling, promoting and facilitating cross-national research. He outlined the government’s support and contributions to LIS since its very beginning and naturally the government’s continued support during the transition to the independence of LIS in 2002. Mr. Meisch acknowledged the strong involvement of LIS in training young academics, collaborative research activities, research projects and highlighted the harmony between LIS and the government’s policy on research and development focused on the knowledge of society aiming at excellence and international visibility.

From left to right: Markus Jäntti, Serge Allegrezza, Claude Meisch, Peter Lanjouw, François Bourguignon, Tim Smeeding, Janet Gornick, Teresa Munzi, Richard Blundell.

The conference sessions began with Philippe Van Kerm from the University of Luxembourg and LISER who presented inequality trends in Luxembourg from (almost) 40 years exploiting LIS household income data. Looking at series of distributive statistics from 1985-2019 and some driving factors behind the surface of the series, Philippe Van Kerm revealed the convincing upward trend of income inequality in Luxembourg. He additionally explored some driving factors behind the trend and showed that the unequal growth of income between the top and bottom percentiles seems to contribute to the inequality in Luxembourg, and even more surprisingly he found that the changing demographic composition of Luxembourg over that past 40 years plays an important role in driving inequality upwards. The discussant Conchita D’Ambrosio (University of Luxembourg) stressed the importance of these results in relation to the government’s strategy of making Luxembourg a knowledge society which has greatly impacted the demographic structure in Luxembourg and ultimately has an impact on the growing income inequality in the country.

The conference followed with presentations by past directors. Tim Smeeding (University of Wisconsin-Madison), Janet Gornick (Stone Centre on Socio-Economic Inequality) and Markus Jäntti (Stockholm University) recounted the history of LIS, as well as the growing research over the past 40 years using LIS data on topics including, but not limited to, inequality, poverty, labor market, gender and distributions of wealth. As discussant, Michael Förster from the University of Antwerp and SciencesPo (previously OECD) further complemented (and complimented) the presentations by highlighting first the vast use he and former colleagues at the OECD made of LIS data in most of the OECD work on inequality. He concluded by showing some topics to pursue in future research using LIS data such as the impact of women’s employment on income inequality, combining income and consumption to look at the distribution of arbitrable income, differing purposes for holding wealth and incorporating perceptions of inequality which are often linked to reality.

Another interesting theme of the conference focused on income inequality in Latin America. Francisco Ferreira from the International Inequalities Institute at LSE, explored the uncertainty in the measurement of inequality in Latin America and found when examining household surveys that while the trends of inequality are robust, the levels of inequality for any given year have considerable variation. He stressed that this is the case when only one data source is used, even much more variation is to be expected when introducing additional sources. Facundo Alvaredo from the Paris School of Economics, shared additional insights on the feeling of uncertainty when measuring inequality in Latin America due to the existing gaps between survey data and national accounts. He showed how the practices of incorporating adjustments for top incomes using register data and upscaling to the national accounts, do not ease the feeling of uncertainty about inequality measures, at least in the case of developing countries. Andrew Heisz (Statistics Canada) as the discussant further inquired about the inequality of the bottom of the distribution, while many researchers focus on adjusting for the top of the distribution, there is very little known about the bottom of the tail as these individuals are largely absent from national statistics which is problematic as it results in a loss of access to benefits, since they are unknown to the government.

The next main session on global poverty and inequality, began with the presentation by Dean Jolliffe from the World Bank. With results based on the World Bank data (which, for high income countries, are in part based on LIS data), he discussed the distribution of extreme poverty, and trends in the international poverty line as well as the societal poverty line which reflects the idea that being poor is relative and declines more slowly over time. The discussant Andrea Brandolini (Bank of Italy) further reflected on the use of the terms absolute and relative when talking about the international poverty line (IPL) because in some ways the IPL is in itself both absolute (fixed and adjusted for inflation) and relative (reflects poverty in the poorest countries at a point in time). The following presentation by LIS’ President François Bourguignon looked at the historic and recent evolution of global inequality. While there is a general agreement on the historical upward trend and recent trend reversal, François Bourguignon discussed the sources of divergence between the data and methodological issues in the measurement of global inequality when looking at the results by Branko Milanovich, by the WIL group (WID) and the data produced by himself based on the World Bank’s PIP. Stephen Jenkins from the London School of Economics, echoed the presentation and discussed the important role of the distributional national accounts approach vs. the household survey approach in explaining the divergence of within-country inequality trends, and concluded that while the two approaches are different, they ought to be complimentary and not in competition.

The 30th Aldi Hagenaars Memorial Award 2023, granted to the writer under 40 whose LIS/LWS Working Paper of the previous year best demonstrated the excellent scholarship that Aldi exhibited was presented to Regina Baker (University of Pennsylvania) and Heather O’Connell (Louisiana State University) for their paper “Structural racism, family structure, and Black–White inequality: The differential impact of the legacy of slavery on poverty among single mother and married parent households”. The Authors presented and shared the findings of their award-winning paper and gladly accepted the distinguished Aldi award. The award winning paper can be found here along with the past Aldi award winning papers on the LIS website.

From left to right: Regina Baker and Heather O’Connell receiving the Aldi Hagenaars Memorial Award 2023 by Peter Lanjouw.

The final session of presentations before the awaited roundtable discussion was on the topic of LIS initiatives. David Garces Urzainqui from the University of Copenhagen gave the first talk on top income adjustments and the approaches currently being explored using capital income with LIS data. Xavier Jara from the International Inequalities Institute at LSE shared some insights on the exploration of linking LIS and EUROMOD to run microsimulations in the EUROMOD software using LIS data with promising preliminary results and many opportunities for future work. Finally, Giovanni Vecchi from the University of Rome presented his joint work with Giulia Mancini (University of Sassari) on the feasibility of a consumption-based counterpart to LIS and LWS databases. Their pilot feasibility study revealed that the consumption flow from durables is the most problematic component in terms of data availability, but the results remained promising for a consumption aggregate without durables, where they found that 60% of the assessed surveys would be perfectly suitable.

The highlight for the conference was its concluding roundtable discussion on the future of LIS moderated by François Bourguignon with renowned speakers from local and international institutions including Serge Allegrezza (STATEC), Richard Blundell (University College London), Peter Lanjouw (LIS), Aura Leulescu (Eurostat, EU Commission) and Luis Felipe López-Calva (World Bank). Beginning the round table discussion, Richard Blundell emphasized again the case for more linkages of data and the benefits of longer time series. He also highlighted the potential value of including available health episode data with links to income, tax, labor-market and family structure to look into the impact and role of health on inequality. He concluded by encouraging countries to perform proper audits (if not already done) of data availability, linkages and accessibility such that we can share amongst ourselves and learn from each other. The round table discussion continued with remarks from Serge Allegrezza who warned that the Big Data revolution – albeit extremely intriguing for some type of analyses – does not enter the realm of statistical institutes, and is a dangerous path for institutions like LIS. Similarly, he urged LIS to be very careful with administrative data due to the difficulty of harmonizing it. Aura Leulescu followed with insights on the importance of pushing for joint distributional information on income and consumption to provide more information about the impact of the inflation crisis on the current cost of living and energy poverty. She additionally discussed the importance of timeliness in concern to income statistics and dealing with low frequency data and outlined that microsimulation models still face some constraints such as the over simulation of benefits. Luis Felipe López-Calva provided insights from the perspective of the World Bank. He discussed the issue of timeliness of the data and attempts to provide forecasted estimates when up-to-date data is unavailable. He also brought forward the question of the pertinence of broadening the analysis to consumption and highlighted the arising challenges of data accessibility in countries that are becoming more reluctant to share data. He concluded by encouraging further collaborations between LIS and the World Bank to proactively tackle the challenges raised and coordinate initiatives. The final speaker of the round table, Peter Lanjouw, reiterated the interest of having income, wealth and consumption available for users. He also raised the issue of geography and spatial coverage; household surveys usually lack the sample size to dig deep into regional levels and proposed assembling data that is spatially disaggregated in addition to the micro data to better observe spatial differences. During the final discussion, the audience members encouraged promoting statistical offices to include data on energy consumption and how energy is used and the importance that LIS continues to incorporate the feedback of users.

The 40th Anniversary Conference was a great success; a testament to all the hard work that has contributed to the success of LIS over that past 40 years. For more information about the presentations and papers discussed above, you can find most of the presentations from the conference available here.

The conference venue: Salle Paul Feidert, Campus Kirchberg, Luxembourg.