Income inequality in Belgium higher than expected

Income inequality in Belgium is higher than previously thought. Moreover, inequality has been on the rise since 2010, according to a study by KU Leuven economics professor André Decoster.

Belgium has long been considered an exception in global inequality research. Income inequality seemed relatively low and stable over the years. But new research has shown that income inequality has increased and is much greater than previously thought.

"We are less exceptional than we thought," says André Decoster, professor of economics at KU Leuven. He teamed up with UAntwerp and ULB for a four-year research project that will be published next week as "The paradox of inequality in Belgium".

"We are less exceptional than we thought"

The reason for this is the growing inequality of income from assets, which has not been sufficiently taken into account in previous studies. In Belgium, income from capital is taxed at a much lower rate than income from labour. Because of this, the tax burden on the top 1 per cent of earners is about half that of the average earner.

Rising inequality

Decoster's research also shows that inequality in Belgium has not remained stable, as was previously thought. Since the financial crisis in 2008, inequality has risen due to the low interest rates that followed.

According to the study, the Belgian state has become more redistributive. Every government since 1992 has tried to increase redistribution and fight inequality, the researchers found. One of the main reasons is the increase in benefits.

^{PHOTO © INA FASSBENDER / AFP}

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