By the end of 2021, the median disposable household income in the EU increased by 3.6% compared with 2020. Employment income is estimated to have increased sharply across all quintiles, while remaining slightly below the pre-pandemic level. The at-risk-of-poverty rate remained stable, with varying rates across countries.
This information comes from the early estimates of income inequality in 2021 published by Eurostat. The estimates anticipate the final income indicators from the European Union Statistics on Income and Living Conditions (EU-SILC) data collected during 2022. This article presents a handful of findings from the more detailed Statistics Explained article.
The COVID-19 pandemic led to a significant reduction in economic activity, including the temporary shutdown of some business sectors, resulting in the unprecedented increase of workers absent from work or working reduced hours and consequent losses in employment income. In reaction, governments introduced temporary support schemes to offset the impact of the COVID-19 crisis.
At the EU level, early estimates for 2021 show a positive evolution across the income distribution, with significant increases for low-income households. This is in line with the main trends in the labour market and the substantial reduction in the number of workers impacted by temporary COVID-19 control measures. In addition, social protection schemes aimed at stabilizing wages and household income continued to be implemented in many Member States.
At-risk-of-poverty rate remained stable
Early estimates also show that the at-risk-of-poverty rate in the EU remained stable in 2021, yet the situation varied across the EU Member States, particularly when assessing the cumulated effects.
In comparison with the pre-pandemic values of 2019, in 2021, for the Member States with available data, 5 registered an increase in the poverty rate in the 2019-2021 period, of which 4 were statistically significant: Greece, Croatia, Latvia and the Netherlands.
In 11 Member States, the poverty rate was stable, and in the remaining 7, it was estimated to have decreased: Bulgaria, Finland, Cyprus, Germany, Lithuania, Romania and Sweden.
For more information:
- Statistics Explained article on early estimates of income inequalities and poverty
- Experimental statistics’ section dedicated to income and poverty indicators
- The final indicators and detailed breakdowns from the European Union Statistics on Income and Living Conditions (EU-SILC) collected during 2022 will be released in June 2023.
Methodological notes:
- This article presents early estimates on the evolution of income inequalities and poverty in 2021. Results are based on modelling taking into account both the impact of the labour market evolution on employment income and the effect of social protection schemes put in place by national governments.
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