In 2014, household disposable income grew by 9.3 %

20.01.2016

Data acquired within the framework of survey conducted by Central Statistical Bureau (CSB) in 2015 show that in 2014, as compared with 2013, household disposable income1 increased by 9.3 % and reached EUR 387 per household member monthly. As compared with increase recorded in 2013 – 10.7 % over 2012, the income growth rate has slowed down slightly.

Household disposable income in Latvia, 2008–2014
(average per household member monthly, EUR)

In 2014, household income from labour rose by 11.6 % – from average EUR 243 per household member monthly in 2013 to EUR 272 in 2014. Income from social transfers2 (pensions, allowances and other payments from budget) grew notably slower – by 3.4 % per household member monthly (from EUR 93 in 2013 to EUR 96 in 2014).

During four-year period, share of social transfers in household disposable income reduced by 7.6 percentage points – from 32.4 % in 2010 to 24.8 % in 2014. Whereas share of income from labour grew from 63.7 % in 2010 to 70.2 % in 2014. The pre-crisis level of 2008, when income from labour accounted for 75.5 % of total disposable income, while income from social transfers only for 20.0 %, still is not reached.

Structure of household disposable income, 2008–2014
(per cent)

 

Compared with 2013, all household groups witnessed comparatively steady income growth in 2014. The most rapid income growth was observed in the poorest (1st quintile group) households – of 8.2 %, as well as in the richest (of 4th and 5th quintile) households – of 8.8 % and 8.6 %, respectively.

Household disposable income by quintile group, 2008 – 2014
(average per household member monthly, EUR)

Quintile group3

2008

2009

2010

2011

2012

2013

2014

Income growth

2014 over 2013, %

1st (poorest)

112

100

97

104

112

125

135

8.2

2nd

201

202

194

199

209

228

245

7.7

3rd

281

259

257

260

272

295

317

7.6

4th

411

355

338

352

372

413

449

8.8

5th (richest)

797

668

620

681

701

780

847

8.6

 

During the last five years, income inequality indices (Gini coefficient4 and quintile share ratio (S80/S205) almost have not changed. In 2014, Gini coefficient constituted 35.4 %, and it has not changed notably as compared with 2013. Statistics on the last five years shows that income received by 20 % of the richest population is 6.5 times higher than income received by 20 % of the poorest population. The exception was year 2012, when quintile share ratio (S80/S20) was slightly lower – 6.3.

Income inequality indicators, 2010–2014

Indicator

2010

2011

2012

2013

2014

Quintile share ratio (S80/S20)

6.5

6.5

6.3

6.5

6.5

Gini coefficient (%)

35.1

35.7

35.2

35.5

35.4

 

Compared with other European Union Member States6, income inequality level in Latvia is high. In 2014, Gini coefficient in Latvia and Bulgaria was the second highest (35.4 %) among the European Union countries. The indicator was higher only in Estonia (35.6 %), whereas in Lithuania and Cyprus it was lower (35.0 % and 34.8 %, respectively). Quintile share ratio (S80/S20) was one of the highest in the EU as well (7.2 in Romania, 6.8 in Bulgaria and Spain, and 6.5 in Greece, Estonia and Latvia).

Household disposable income data source: survey on income and living conditions conducted by the CSB in 2015 (EU-SILC – EU Statistics on Income and Living Conditions). The survey covered 6.1 thousand households and 11.7 thousand respondents aged 16 and over. CSB will collect data on household income in 2015 during time period from March to June 2016.

More information on survey of 2015 is available in CSB website database section ‘Personal Income’.

Methodological explanations

1Disposable income is cash income from labour, employee income in kind received by using company car for private needs estimated in cash, income or losses received from self-employment, received pensions and benefits, regular material assistance from other households, profit from interests of deposits, dividends, shares, income received by children aged under 16, income from property rental, receipts from tax adjustments from the State Revenue Service (for business activities, eligible costs – education, medical treatment etc.).

2Social transfers are pensions and benefits paid by the State or municipality, child maintenance payments, scholarships, social insurance benefits and compensations, including the ones paid by other countries.

3 Quintilegroup is one fifth (20 %) of the number of the surveyed households grouped in increasing sequence according to the disposable income per one household member. Bottom (first) quintile includes one fifth of the households with the lowest income, while top (fifth) – one fifth of the households with the highest income level.

4 Gini coefficientcharacterises income inequality. It varies from 0 to 100. Gini coefficient is 0, if there is absolute equality of income (i.e., all population has the same income), but the closer it gets to 100, the greater the income inequality.

5 Quintile share ratio (S80/S20) is ratio of total equivalised disposable income received by the 20 % of the country’s population with the highest equivalised disposable income (top quintile) to that received by the 20 % of the country’s population with the lowest equivalised disposable income (bottom quintile).

6 Eurostat indicators on survey year 2014, when Latvia compiled statistics on income in 2013, are available in Eurostat website database: ‘Quintile share ratio’, ‘Gini coefficient’.

Media requests:
Beate Danusēviča, Kristīne Romanovska
Information and Communication Section
media [at] csb [dot] gov [dot] lv
Tel.: +371 67366924, +371 67366621, +371 27880666
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More information on data:
Income and Living Conditions Statistics Section
Viktors Veretjanovs
Viktors [dot] Veretjanovs [at] csb [dot] gov [dot] lv
Tel. +371 67366609