Nuanced Wealth Inequality: How Measurement Choices Affect the Gini Coefficient in 30 European Countries

Abstract

Standard measures of wealth inequality rest on the boundary drawn by the national accounts, in which funded pension entitlements are included as financial assets while unfunded entitlements in public pay-as-you-go schemes are not. This paper examines how that asymmetry affects measured wealth inequality in 30 European countries. Three wealth concepts are compared for 2021: net wealth as published (concept 1), net wealth excluding funded pension wealth (concept 2), and net wealth including unfunded pension entitlements (concept 3). Eurostat's pension stocks (nasa_10_pens1) are distributed across the 127 percentile groups of the World Inequality Database using decile profiles estimated on three countries. Sweden is replaced by register-based estimates from Hammar et al. (2026). Excluding funded pension wealth raises the Gini coefficient by 0.025 on average across the 26 countries for which the adjustment can be computed, with the effect concentrated in countries with large funded stocks. Including unfunded entitlements lowers the computed Gini by 0.21 on average across all 30 countries. The ranking of countries is not robust to the choice of concept: the rank correlation between concepts 1 and 3 is 0.49, and Denmark moves 24 positions. The adjustments follow in closed form from the size of the pension stocks, the observed wealth distribution and the assumed pension profiles. The average order of magnitude is supported by published micro-data estimates for Germany, Austria and Switzerland and by Wroński (2023), but the country ranking is not. The results should therefore be read as evidence that the way a pension system is financed matters greatly for measured wealth inequality, rather than as precise estimates of how individual countries rank. This record contains the paper in English and a Swedish translation of the same text.