viduals in the top 1% or top 0.1% of the income distribution in year _t_ will still be in the same top group in year _t+1_ (panel a) and _t+3_ (panel b). We take the same approach as Alstadsæter _et al._ (2016) for Norway and present results using two different income distributions: including and excluding undistributed corporate profits from the calculation of individual incomes. In Figure 8a, we first show that 70-80% of individuals in the top 1% in any given year will stay in the top 1% in the following year, regardless of the income aggregate we use. This is consistent with the fact that undistributed profits represent a relatively small share of total income from most of the individuals at the top 1%. The gap between the two series is much larger when we consider persistence at the top 0.1% – the probability of staying in the group is close to 70% when we consider the series including undistributed profits and falls to 60-65% when only distributed income is considered. When considering persistence over three years in Figure 8b, close to 60% of individuals stay in the top 1% while that figure falls to 55% in the top 1% when considering undistributed profits (and is below 50% when only distributed income is included).<sup>24</sup> The level of persistence in the top 1% is quite similar to other settings, while for those at the top 0.1% is significantly higher. Alstadsæter _et al._ (2016) show that in Norway the persistence at the top 1% is approximately 60% over one year and 5055% over three years; H ́erault _et al._ (2022) document similar levels of 65-75% over one year and 40-50% over three years in Australia. For those at the top 0.1%, where undistributed corporate profits matter much more in our settings, we measure much higher persistence levels – the probability of observing the same individuals at the top 0.1% over three years for example is 55-60% in Honduras vs. 30-40% in Norway and Australia.

# **7.3 Female participation at the top**

An additional dimension of income inequality we are able to observe using administrative tax records is the gender gap: what is the representation of women at the very top of the income distribution?

In Figure 9, we present the share of female taxpayers in the top quantiles of the distribution, pooled for the 2014-2019 period. We show the female share for two income definitions, excluding or including undistributed corporate profits. The overall

> 24While the previous exercises use a discrete measure of persistence at the top, asking if individuals remained at the top 1% or 0.1% earners over time, an alternatively measure is to ask how the rank of an individual in the entire distribution changes over time, given their ranking at some initial period – that is to compute the rank-rank correlation of individual income over time. We present that exercise in Figure A.3, where we show the median rank in 2014 and 2018 for each bin of income ranking in 2011<sup>25</sup> . What we document is a very strong, positive correlation between initial ranking and median ranking four and seven years after the initial measurement – individuals at any given position in the initial period are likely to stay in a similar position over the years.

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