Income Inequality in Belgium 1985–2022: New Evidence From Distributional National Accounts

ABSTRACT In comparative studies on income inequality, Belgium frequently stands out as an exception: the level of inequality is low and has not increased over the last few decades, contrasting with the experiences of many other Western countries. In this paper, we apply the methodology of the Distributional National Accounts to reconsider the evolution of income inequality in Belgium between 1985 and 2022. Our findings underscore the impact of aligning the distributional information in microdata with national accounts aggregates. We unveil a previously unobserved rise in income inequality in the aftermath of the financial crisis. Through a decomposition by income source, it is ascertained that this rise in inequality is predominantly attributable to increasing capital income inequality, which in turn is due to a shifting composition of capital income. Specifically, the significance of interests from savings accounts and other fixed‐rate assets has diminished significantly in comparison to dividends and undistributed profits.