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A characterization of income and consumption inequality in Portugal
This paper aims to characterize the evolution of household income and consumption inequality in Portugal between 1995 and 2015. In this period, income inequality showed an upward profile in the first decade and a downward path afterwards, while consumption inequality decreased significantly over the entire period. Based on a pseudo panel, we estimate the role of the life cycle and of the different cohorts in explaining household inequality. In line with the literature, it is concluded that income and expenditure inequality increases over the life cycle. In turn, there is a decrease in inequality in successive cohorts in Portugal, particularly in the case of consumption. The article suggests that the strengthening of income and consumption smoothing mechanisms in the Portuguese economy may have contributed to this evolution.