Archive:Income inequality statistics, data 2012

Income Inequality- Nearly 40 per cent of national income was earned by the fifth quintile

Statistics in focus XX/2014; Author: Emanuela DI FALCO
ISSN:2314-9647 Catalogue number:KS-SF-14-XXX-EN-N

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Income inequality is a complex phenomenon, the result of interaction between several factors. It can be related to employment patterns, income sources, individual characteristics (education level, age, gender, etc.) or household features (number of earners in the household, family size, etc.). Inequality is a broader concept than poverty; while poverty mainly relates to the lowest part of the income distribution, inequality takes into account the living conditions of all people in a society.

The analysis showed that Norway and Slovenia had the lowest level of inequality (as measured by the Gini coefficient ) in Europe in 2012, and that Spain and Latvia had the highest level. Overall, ten countries had a level of inequality higher than the EU-28 average in 2012. In Europe, nearly 40% of total national equivalised income goes on average to people belonging to the highest (fifth) income quintile, and less than 10% to people in the first quintile. This distribution of income explains the income discrepancies among people. It should be noted that inequality decreased in 12 EU countries in 2008-12, mainly due to the income losses seen in the upper part of the income distribution during the financial and economic crisis.

Table, Figure or Map X: Full title of the Table, Figure or Map
Source: Eurostat (educ_ilang)

Main statistical findings

The Gini coefficient across the EU in 2012

The Gini coefficient reveals differences of approximately 10 points across the EU in 2012.

Income inequality measured by the Gini coefficient varied by approximately 10 points across Europe in 2012, with the lowest levels of inequality seen in Norway and Slovenia and the highest in Spain and Latvia. Only four countries (France, Croatia, Poland and Cyprus) had an income inequality level around the EU-28 average (30.6). In ten countries, income discrepancies were above the EU-28 average, ranging from 32 in Italy and Lithuania to 35 or more in Spain and Latvia.

In the remaining countries, the income disparities were below the EU-28 average , ranging from 28.3 in Germany to less than 24 in Slovenia and Norway. To summarise, the analysis showed high levels of inequality across southern Europe, as seen in Figure 1, but there no dominant pattern in central- and northern-European countries.

Social benefits and pensions played an important role in reducing inequality in 2012

Figure 2 shows the Gini coefficients based on total equivalised disposable household income . These were calculated without including social benefits and pensions among the income sources, to measure the impact of social transfers in reducing inequality. As expected, income inequality would have been greater in all countries if social benefits and pensions were not included, with the highest values seen in the United Kingdom and Greece and the lowest in Malta, Iceland, Norway and Slovakia. Social transfers and pensions played a crucial role in Sweden, where excluding them reduced inequality (measured by a Gini coefficient calculated without social benefits) by around 53%, and in another nine countries where excluding them reduced inequality by 40%. Excluding social benefits and pensions did not significantly affect inequality in Bulgaria and Cyprus.

Income disparities increased in Denmark and decreased in Iceland and Norway in 2008-12

Although inequality in the EU-28 remained almost at the same level in 2008-12, a different pattern is seen for individual countries. Income discrepancies decreased in 12 EU Member States and the three EFTA countries included in the analysis, and increased in the remaining countries. Despite their high levels of inequality in 2012, Romania, Bulgaria and Lithuania managed to reduce inequality by about 5 % or more over the period analysed. In contrast, despite low inequality levels in 2012, all countries included in the red circle in Figure 3 saw an increase in inequality since 2008, up to 5 % and more in Austria, Slovakia, Hungary and Denmark. Denmark and Iceland saw the biggest changes in 2008-12: a 12% increase in inequality in Denmark and a 12 % decrease in Iceland.

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Notes

[[Category:<Under construction>|Name of the statistical article]]

[[Category:<Household_income,_expenditure_and_debt>|Income inequality statistics]] [[Category:<Living_conditions>|Income inequality statistics]] [[Category:<Statistical article>|Income inequality statistics]] [[Category:<Statistics in focus>|Income inequality statistics]]