Changes both in policy and markets - such as the structural transformation of many countries over the last twenty years due to shifting wealth - affect the income distribution through different channels. The evolution of inequality within countries is the result of policy changes as well as of changes in individual and household endowments and resources, returns to those resources, labour market participation behaviour, and demographic characteristics. Differences between market incomes and disposable incomes are sizable in many OECD countries, which points to the important redistributive role of the state. The role of taxes, cash, and in-kind transfers is markedly less important in many developing countries.