Two decades of top income shares in Honduras

Abstract

This study constructs distributional national accounts for Honduras from 2003 to 2019, integrating household surveys, administrative tax records, and national account aggregates. It assembles comprehensive data on formal income for high-income individuals, including information on corporate shareholders, which allows corporate profits to be assigned to their owners. Findings reveal a high and persistent inequality: the top 1 percent highest earners received approximately 30 percent of total pre-tax income, placing Honduras among the most unequal countries in the world. Capital income, mostly undistributed corporate profits, represent close to half of income for the top 0.1% of earners, highlighting its role in driving top income dynamics. Finally, using a panel of tax records, we also document that not only inequality is mostly unchanged over two decades, but the identity of top earners is also persistent — over half of those observed in the top 0.1% will stay there in a three year horizon.