Figures and data in Evaluating the quality of gross incomes in SILC: Compare them with fiscal data and re-calibrate them using EUROMOD

Abstract

In this paper, we shed light on the quality of the gross incomes as reported in the Survey on Income and Living Conditions (SILC). This is done in three steps. First, as both net and gross incomes are reported in SILC, implicit tax rates are calculated and evaluated. In a second step, gross incomes from SILC are compared with gross incomes reported on the fiscal form for the same individuals. Finally, we make use of EUROMOD to re-calibrate SILC gross incomes in order to make them consistent with the reported net ones. We find that, on average, fiscally reported gross incomes exceed gross incomes in the SILC survey. It is not clear however whether the re-calibration method (whereby we use an iterative method to construct adjusted SILC gross incomes starting from the observed net ones) is a genuine improvement upon the reported gross income distribution.

This article contains 6 figures and 18 tables.

Figures

**Figure 1.** Implicit average tax rates (% of gross income).

**Figure 2.** Distribution of total household gross income in IPCAL and SILC (% of observations).

**Figure 3.** Distribution of differences in total household gross income in IPCAL and SILC (% of observations).

**Figure 4.** Iterative procedure used to calculate new gross incomes in SILC.

**Figure 5.** Distribution of household gross income in IPCAL, SILC reported and SILC adjusted (% of observations).

**Figure 6.** Distribution of differences in household gross income in IPCAL, SILC reported and SILC adjusted (% of observations).

Tables

Table 1.

	Number of observations	Number of imputed values		Imputed values as % of total
Income source		Net	Gross	Net	Gross
Employment	5,635	186	424	3.3	7.5
Self-employment	714	162	444	22.7	62.2
Old age pensions	2,423	331	1,165	13.7	48.1
Survivor pensions	103	7	37	6.8	35.9
Unemployment benefit	1,441	4	4	0.3	0.3
Sickness benefit	185	24	99	13.0	53.5
Disability benefit	471	17	202	3.6	42.9

Source: SILC 2010.

Table 2.

Dataset	Matched	Not Matched	Number of observations
EUROMOD	11,656	3,044	14,700
SILC (p-file)	11,656	160	11,816
IPCAL	11,656	136	11,792

Source: SILC 2010 and IPCAL.

Table 3.

	Included		Excluded
HY040G	income from rental of a property or land	HY050G	family/children related allowances
HY080G	regular inter-household cash transfer received	HY060G	social exclusion not elsewhere classified
HY090G	interests, dividends, profit from capital investment in unincorporated businesses	HY070G	housing allowances
HY110G	income received by people aged under 16	PY021G	company car
PY010G	employee cash or near cash income	PY140G	education-related allowances
PY050G	cash benefits or losses from self-employment
PY090G	unemployment benefits
PY100G	old age benefits
PY110G	survivor benefits
PY120G	sickness benefits
PY130G	disability benefits
PY080G	pension from individual private plans

Table 4.

Mean income		Mean difference IPCAL – SILC		Standard deviation	Number of observations
IPCAL (€/year)	SILC (€/year)	(€/year)	%	(€/year)
44,135	41,729	2,405	5.8	30,624	6,095

Source: SILC 2010 and IPCAL, authors’ own calculations.

Table 5.

	Number of observations				% of observations
Income source	IPCAL & SILC	IPCAL	SILC	Total	IPCAL & SILC	IPCAL	SILC
Employment (1)	5,592	1,298	145	7,035	79.5	18.5	2.1
Self-employment (2)	567	218	307	1,092	51.9	20.0	28.1
(1) and (2)	6,187	1,049	146	7,382	83.8	14.2	2.0
Old age pensions (3)	2,291	298	122	2,711	84.5	11.0	4.5
Survivor pensions (4)	92	422	78	592	15.5	71.3	13.2
(3) and (4)	2,458	283	50	2,791	88.1	10.1	1.8
Unemployment	1,175	847	251	2,273	51.7	37.3	11.0
Sickness (5)	142	1,213	42	1,397	10.2	86.8	3.0
Disability (6)	65	498	402	965	6.7	51.6	41.7
(5) and (6)	503	881	136	1,520	33.1	58.0	8.9
All	9,476	777	164	10,417	91.0	7.5	1.6

Source: SILC 2010 and IPCAL, authors’ own calculations.

Table 6.

	Mean income		Mean difference IPCAL – SILC		Standard deviation	Number of observations
Income source	IPCAL (€/year)	SILC (€/year)	(€/year)	(% of SILC)	(€/year)
Employment (1)	33,455	31,554	1,901	6%	8,736	5,592
Self-employment (2)	55,667	24,221	31,446	130%	66,920	567
(1) and (2)	35,928	31,500	4,427	14%	22,636	6,187
Old age pensions (3)	17,229	17,953	−723	−4%	17,701	2,291
Survivor pensions (4)	14,839	13,883	955	7%	2591	92
(3) and (4)	18,607	17,702	904	5%	16,767	2,458
Unemployment	9,270	8,767	503	6%	7,635	1,175
Sickness (5)	6,097	5,591	506	9%	3,623	142
Disability (6)	3,907	11,914	-8,007	-67%	7,988	65
(5) and (6)	10,608	9,932	676	7%	5,986	503
All	30,462	26,533	3,930	15%	23,852	9,476

Source: SILC 2010 and IPCAL, authors’ own calculations.

Table 7.

	Mean income		Mean difference IPCAL – SILC		Standard deviation	Number of observations
Income source	IPCAL (€/year)	SILC (€/year)	(€/year)	(% of SILC)	(€/year)
Employment (1)	33,847	31,907	1,939	6%	8,491	5,019
Self-employment (2)	63,761	27,777	35,984	130%	93,942	134
(1) and (2)	34,296	31,390	2,906	9%	18,281	5,390
Old age pensions (3)	17,395	18,370	-974	-5%	19,944	1,195
Survivor pensions (4)	14,839	13,883	955	7%	2,591	92
(3) and (4)	18,735	17,973	761	4%	18,682	1,321
Unemployment	9,217	8,772	444	5%	3,915	1,172
Sickness (5)	6,097	5,591	506	9%	3623	142
Disability (6)	3,907	11,914	−8,007	−67%	7988	65
(5) and (6)	10,608	9,932	676	7%	5,986	503
All	30,812	27,473	3,339	12%	22,336	7,513

Source: SILC 2010 and IPCAL, authors’ own calculations.

Table 8.

	Mean income		Mean difference IPCAL – SILC		Standard deviation	Number of observations
Income source	IPCAL (€/year)	SILC (€/year)	(€/year)	(% of SILC)	(€/year)
Employment (1)	36,293	33,991	2,302	7%	8,218	3,480
Self-employment (2)	13,040	17,194	−4,154	−24%	14,177	35
(1) and (2)	36,488	34,076	2,412	7%	8,610	3,500
Old age pensions (3)	24,196	23,375	821	4%	44,093	42
Survivor pensions (4)	15,426	13,788	1,638	12%	1,871	6
(3) and (4)	23,097	21,791	1,306	6%	39,898	51
Unemployment	5,731	4,926	805	16%	4,433	268
Sickness (5)	4,799	4,098	701	17%	3,111	63
Disability (6)	2,273	6,250	−3,977	−64%	5,126	23
(5) and (6)	6,615	4,712	1,904	40%	5,199	98
All	38,089	34,862	3,227	9%	16,421	3,535

Source: SILC 2010 and IPCAL, authors’ own calculations.

Table 9.

	Mean income		Mean difference IPCAL – SILC		Standard deviation	Number of observations
Income source	IPCAL (€/year)	SILC (€/year)	(€/year)	(% of SILC)	(€/year)
Employment (1)	36,264	34,247	2,016	6%	14,706	4,687
Self-employment (2)	63,873	38,533	25,340	66%	73,582	325
(1) and (2)	38,765	33,905	4,860	14%	23,947	5,250
Old age pensions (3)	17,257	17,740	−483	−3%	13,470	2,209
Survivor pensions (4)	15,386	14,608	778	5%	2,255	85
(3) and (4)	18,682	17,524	1,158	7%	12,524	2,371
Unemployment	9,544	9,356	189	2%	4,211	567
Sickness (5)	11,614	10,418	1,197	11%	4,930	31
Disability (6)	5,216	16,065	−10,850	−68%	8,358	41
(5) and (6)	12,942	12,472	470	4%	6,750	343
All	31,390	27,417	3,973	14%	22,093	8,486

Source: SILC 2010 and IPCAL, authors’ own calculations.

Table 10.

	(1)	(2)	(3)	(4)	(5)	(6)	(7)
Decile	Income			Difference		Implicit tax rate
	reported net	reported gross	adjusted gross	(3)-(2)in €	(3)-(2) in % of (2)	(2)-(1) in % of (2)	(3)-(1) in % of (3)
1	3,288	4,296	3,456	−840	−19.6	23.5	4.9
2	10,356	13,632	12,012	−1,620	−11.9	24.0	13.8
3	14,628	20,460	19,248	−1,212	−5.9	28.5	24.0
4	17,268	24,720	24,204	−516	−2.1	30.1	28.7
5	19,224	28,116	28,908	792	2.8	31.6	33.5
6	21,048	30,876	32,796	1,920	6.2	31.8	35.8
7	23,064	34,548	37,512	2,964	8.6	33.2	38.5
8	25,500	39,180	43,044	3,894	9.9	34.9	40.8
9	29,208	46,176	51,792	5,616	12.2	36.7	43.6
10	42,696	68,676	87,504	18,828	27.4	37.8	51.2
Total	20,616	31,056	34,032	2,976	9.6	33.6	39.4
	Number of observations					5,618

Source: SILC 2010, authors’ own calculations.

Table 11.

	(1)	(2)	(3)	(4)	(5)	(6)	(7)
Decile	Income			Difference		Implicit tax rate
	reported net	reported gross	Adjusted gross	(3)-(2)in €	(3)-(2) in % of (2)	(2)-(1) in % of (2)	(3)-(1) in % of (3)
1	1,200	1,452	4,296	2,844	195.9	17.4	72.1
2	5,988	7,980	9,864	1,884	23.6	25.0	39.3
3	10,620	13,356	16,248	2,892	21.7	20.5	34.6
4	14,388	18,408	22,620	4,212	22.9	21.8	36.4
5	17,232	21,840	27,900	6,060	27.7	21.1	38.2
6	19,524	25,788	35,448	9,660	37.5	24.3	44.9
7	22,416	28,956	41,472	12,516	43.2	22.6	45.9
8	27,720	35,436	55,056	19,620	55.4	21.8	49.7
9	34,524	46,536	72,060	25,524	54.8	25.8	52.1
10	58,008	76,332	128,604	52,272	68.5	24.0	54.9
Total	20,436	26,544	39,576	13,032	49.1	23.0	48.4
	Number of observations					700

Source: SILC 2010, authors’ own calculations.

Table 12.

	(1)	(2)	(3)	(4)	(5)	(6)	(7)
Decile	Income			Difference		Implicit tax rate
	reported net	reported gross	adjusted gross	(3)-(2)in €	(3)-(2) in % of (2)	(2)-(1) in % of (2)	(3)-(1) in % of (3)
1	3,360	3,624	3,360	−264	−7.3	7.3	0.0
2	9,576	10,068	9,576	−492	−4.9	4.9	0.0
3	11,532	12,168	11,532	−636	−5.2	5.2	0.0
4	12,456	13,296	12,468	−828	−6.2	6.3	0.1
5	13,380	14,448	13,428	−1,020	−7.1	7.4	0.4
6	14,544	16,128	15,144	−984	−6.1	9.8	4.0
7	15,804	18,084	17,124	−960	−5.3	12.6	7.7
8	17,808	21,336	21,204	−121	−0.6	16.5	16.0
9	20,448	25,16	27,276	2,160	8.6	18.6	25.0
10	32,856	39,324	56,712	17,338	44.2	16.4	42.1
Total	15,108	17,256	18,684	1,428	8.3	12.4	19.1
	Number of observations					2,423

Source: SILC 2010, authors’ own calculations.

Table 13.

	(1)	(2)	(3)	(4)	(5)	(6)	(7)
Tertile	Income			Difference		Implicit tax rate
	reported net	reported gross	adjusted gross	(3)-(2)in €	(3)-(2) in % of (2)	(2)-(1) in % of (2)	(3)-(1) in % of (3)
1	8,916	9,120	8,916	−204	−2.2	2.2	0.0
2	13,320	13,932	13,476	−456	−3.3	4.4	1.2
3	17,604	19,824	19,992	168	0.8	11.2	11.9
Total	13,188	14,196	14,028	−168	−1.2	7.1	6.0
	Number of observations					103

Source: SILC 2010, authors’ own calculations.

Table 14.

	(1)	(2)	(3)	(4)	(5)	(6)	(7)
Decile	Income			Difference		Implicit tax rate
	reported net	reported gross	adjusted gross	(3)-(2)in €	(3)-(2) in % of (2)	(2)-(1) in % of (2)	(3)-(1) in % of (3)
1	732	792	792	0	0.0	7.6	7.6
2	1,512	1,632	1,656	24	1.5	7.4	8.7
3	2,208	2,316	2,388	72	3.1	4.7	7.5
4	3,324	3,480	3,552	72	2.1	4.5	6.4
5	4,428	4,644	4,704	60	1.3	4.7	5.9
6	5,892	6036	6,264	228	3.8	2.4	5.9
7	8,436	8,748	8,772	24	0.3	3.6	3.8
8	10,392	10,584	10,716	132	1.2	1.8	3.0
9	11,556	11,748	11,724	−24	−0.2	1.6	1.4
10	15,516	15,756	15,996	240	1.5	1.5	3.0
Total	6,300	6,480	6,552	72	1.1	2.8	3.8
	Number of observations					1,186

Source: SILC 2010, authors’ own calculations.

Table 15.

	(1)	(2)	(3)	(4)	(5)	(6)	(7)
Tertile	Income			Difference		Implicit tax rate
	reported net	reported gross	adjusted gross	(3)-(2)in €	(3)-(2) in % of (2)	(2)-(1) in % of (2)	(3)-(1) in % of (3)
1	1,320	1,428	1,464	36	2.5	7.6	9.8
2	4,596	4,872	5,100	228	4.7	5.7	9.9
3	12,072	12,660	13,416	756	6.0	4.6	10.0
Total	5,952	6,276	6,612	336	5.4	5.2	10.0
	Number of observations					182

Source: SILC 2010, authors’ own calculations.

Table 16.

	(1)	(2)	(3)	(4)	(5)	(6)	(7)
Tertile	Income			Difference		Implicit tax rate
	reported net	reported gross	adjusted gross	(3)-(2)in €	(3)-(2) in % of (2)	(2)-(1) in % of (2)	(3)-(1) in % of (3)
1	168	600	168	−432	−72.0	72.0	0.0
2	480	732	480	−252	−34.4	34.4	0.0
3	2,100	276	2,100	1,824	660.9	−660.9	0.0
Total	912	528	912	384	72.7	−72.7	0.0
	Number of observations					98

Source: SILC 2010, authors’ own calculations.

Table 17.

	Mean income		Mean difference IPCAL – SILC		Standard deviation	Number of observations
Income source	IPCAL (€/year)	SILC (€/year)	(€/year)	(% of SILC)	(€/year)
SILC reported	44,135	41,729	2,405	5.8%	30,624	6,095
SILC adjusted	44,135	45,956	−1,821	−4.0%	42,035	6,095

Source: SILC 2010, authors’ own calculations.

Table 18.

	Mean income		Mean difference IPCAL – SILC		Standard deviation	Number of observations
Income source	IPCAL (€/year)	SILC (€/year)	(€/year)	(% of SILC)	(€/year)
Employment (1)	33,455	34,522	−1,067	−3%	12,128	5,592
Self-employment (2)	55,667	34,797	20,870	60%	68,014	567
(1) and (2)	35,928	35,694	234	1%	25,306	6,187
Old age pensions (3)	17,229	19,722	−2,493	−13%	42;037	2,291
Survivor pensions (4)	14,839	13,528	1,311	10%	3,290	92
(3) and (4)	18,607	19,339	−732	−4%	40,524	2,458
Unemployment	9,270	8,544	725	8%	7,635	1,175
Sickness (5)	6,097	5,841	256	4%	4,496	142
Disability (6)	3,907	3,622	285	8%	1,582	65
(5) and (6)	10,608	9,969	639	6%	4,178	503
All	30,462	29,673	789	3%	31,878	9,476

Source: SILC 2010, authors’ own calculations.