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Research findings - Social Situation Monitor - The composition of income at different points of the income distribution

The composition of gross household income differs across EU Member States. Figure 7 distinguishes five sources of income: earnings of employees, self-employment and capital (which together make up market income), plus pensions and social transfers.

The share of market income is smallest in Hungary (70%) and largest in Malta, Cyprus, Estonia and the UK (79-81%). The proportion of earnings in total gross income is largest in Estonia, where 76% of gross income comes from this source. Self-employment is most important in Greece and Italy, where over 20% of gross income comes from this source, while those two countries have the smallest share of income from employment. (The rank order of countries according to the different sources of income is shown in Table 5.) Capital income accounts for only a small share (between 1 and 5%) of the total in most countries, though in France this share is 11%.

The share of pensions is largest in Romania, Italy and Greece (around 20-22% of total gross income). Social transfers are greatest in proportional terms in Ireland and Denmark.

Figure 7: Sources of gross income, 2011 income year

Ineq_9_Sources of gross income

The composition of income tends to differ across the income distribution. In the case of the lowest income group (with income below 50% of the median) the share of market income is smaller than average in all countries, ranging from 28% (in Finland) to 72% (in Greece). Among households in the high-income group (over 200% of median income) the share of market income varies between 77% of total income (in Portugal) and 94% (in the Czech Republic, Slovakia and the UK). In the middle-income group (between 80% and 120% of median income), the share of income from market sources is generally higher than for the low-income group, but smaller than in higher-income groups (Greece is an exception). Cyprus is unique in that market income within the higher-income groups accounts for a lower share of income than in the middle group (Figure 8 and Table 5).

Figure 8: The share of market income according to income status, 2011 income year

Ineq_10_The share of market income according to income status 

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