Contribution of the financial services and gaming sectors on the wages of Maltese households : a SAM-based HEA

Abstract

The goal of this dissertation is to assess the income distributional properties of the financial services and gaming sectors on Maltese households. These two sectors deserve due attention following their significant contribution to the Maltese economy over the last decade. Therefore, this dissertation examines the contribution of the financial services and gaming sectors on the wages and salaries of different Maltese household groups via Hypothetical Extraction Analysis. A 2010 Household Social Accounting Matrix for Malta was primarily constructed, which was utilised as the basis for the Hypothetical Extraction Method. The 2010 Household Social Accounting Matrix is the first one ever constructed for Malta that adheres to the 2010 European System of National and Regional Accounting Framework. The application of this comprehensive economy-wide data framework provides a snapshot of the entire circular flow of income and expenditure for the Maltese economic system with the domestic household institution disaggregated into five income quintiles. The contribution of the financial services and gaming sectors on the wages received by Maltese households was assessed via the estimation of linkage measures based on the expanded Hypothetical Extraction Method by Dietzenbacher and Lahr (2013), which was initially pioneered by Strassert (1968). This methodology captures sectoral inter-linkages while considering their size effects. To measure the induced effects on output production and labour income across every Maltese household group, SAM-based multipliers were estimated that follow the Carderente and Sancho (2006) methodological structure. Results portray that demand-side policies targeting the financial services and gaming sectors distribute more labour income to the highest income-earning households compared to the low income-earning households.