In 2015, income of the poorest population increased by 10.6 %

19.01.2017

The results of the survey conducted by the Central Statistical Bureau (CSB) in 2016 show that, compared to 2014, in 2015 the most rapid household disposable income1 growth – of 10.6 % – was observed in the poorest households (belonging to the 1st quintile group). The average annual income increase in the country accounted for 7.6 %. The smallest increase was recorded in the households belonging to the 2nd quintile group – of 4.8 %. In the richest households (those belonging to the 5th quintile group) the annual income rise (comprising 5.7 %) was smaller than the national average.

 

Household disposable income by quintile group; 2008–2015

 

Quintile group2

2008

2009

2010

2011

2012

2013

2014

2015

Income growth in

2015, compared to 2014 (%)

Income growth in

2015, compared to 2010 (%)

on average per household member monthly, euros

1st (poorest households)

112

100

97

104

112

125

135

150

10.6

54.4

2nd

201

202

194

199

209

228

245

257

4.8

32.2

3rd

281

259

257

260

272

295

317

340

7.2

32.2

4th

411

355

338

352

372

413

449

483

7.6

43.0

5th (richest households)

797

668

620

681

701

780

847

896

5.7

44.4

Average in the country

355

303

286

305

320

354

387

417

7.6

45.8

 

Compared to the lowest point of the economic crisis, i.e., the year 2010, in 2015 the sharpest income rise – of 54.4 and 44.4 %, respectively – was observed in the poorest households (belonging to the 1st quintile group) and the richest households (belonging to the 5th quintile group). The income received by the households of 2nd and 3rd quintile group grew significantly slower – by 32.2 %.

Income inequality in Latvia has reduced. Compared to 2014, in 2015 the Gini coefficient was 0.9 percentage points smaller and constituted 34.5 %. In 2015, income of 20 % of the richest population exceed that of 20 % of the poorest population 6.2 times (6.5 times in 2014).

Income inequality indicators; 2011–2015

Indicator

2011

2012

2013

2014

2015

Gini coefficient3 (%)

35.7

35.2

35.5

35.4

34.5

Quintile share ratio (S80/S20)4

6.5

6.3

6.5

6.5

6.2

 

Compared to other European Union (EU) Member States5, the income inequality level in Latvia is high. The latest data show that Latvian Gini coefficient was one of the highest in the EU. Higher coefficient was recorded only in Lithuania (37.9 %), Romania (37.4 %), Bulgaria (37 %), Estonia (34.8 %) and Spain (34.6 %); the EU average indicator constituted 31 %. The quintile share ratio was one of the highest in the EU as well – 8.3 in Romania, 7.5 in Lithuania, 7.1 in Bulgaria, 6.9 in Spain, 6.5 in Greece, 6.2 in Estonia and Latvia; the EU average indicator – 5.2.

The data source used for the household disposable income statistics is the survey EU Statistics on Income and Living Conditions (EU-SILC) conducted by the CSB in 2016. The survey covered 6 thousand households, and 11.6 thousand respondents aged 16 and over were interviewed.  The CSB will collect the data on the household income received in 2016 during the period from February to June 2017, and respondents will be able to complete electronic questionnaire online.

More information on the results of the survey conducted in 2016 is available in the CSB database section Personal Income.

 

Methodological explanations

1Disposable (net) income – 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, pensions and benefits received, regular material assistance from other households, profit from deposit interest, dividends, shares, income received by children aged under 16, income from property rental, receipts for tax adjustments from the State Revenue Service (for business activities, eligible costs – education, medical treatment etc.). From this total amount of income the following items are deducted: real estate tax, amount of money regularly given to other households, amount paid to the State Revenue Service due to unpaid or insufficiently paid income tax.

2 Quintile group is one fifth (20%) of the number of surveyed households grouped in increasing sequence according to the disposable income per one household member. The lowest (1st or bottom) quintile group includes one fifth of the households with the lowest income, while the highest (5th or top) – one fifth of the households with the highest income.

3 Gini coefficient characterises inequality of income. 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 is inequality of income.

4Ratio 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).

5 Eurostat data from the survey of 2015 are available in Eurostat databases – Quintile share ratio, Gini coefficient; the data of the Latvian survey of 2016 are available in CSB database – Population and Social Processes.

 

 

Media requests:
Sanda Rieksta
Information and Communication Section
media [at] csb [dot] gov [dot] lv
Phone: +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
Phone: +371 67366609