On household disposable income in 2009

03.03.2011

Central Statistical Bureau has compiled provisional results of ‘’Community Survey on Income and Living Conditions” (EU-SILC1) on household income in 2009.Data show significant changes in employment and volume of wages and salaries.

Due to the job loss of the economically active household members the share of the households, main source of subsistence of which is wages and salaries, has reduced from 66% in 2008 to 59% in 2009.In the meantime the share of households living from social transfers2 has increased from 29% to 37%.

Compared to 2008, household disposable income3 in 2009 have diminished by 16% or by LVL 40 per month calculating per household member (in 2009 - LVL 214, in 2008 - LVL 253) and have dropped below the income level of 2007.

Changes of household disposable income in 2004-2009
(LVL per household member monthly)

 

All

households

Urban

Rural

2004

100

112

75

2005

122

140

88

2006

154

171

118

2007

226

250

173

2008

253

277

199

2009

214

234

169

More significant reduction of the income was recorded in Riga and Pierīga region.Prior these regions were characteristic with noticeably higher income level than average in the country.

Household disposable income in statistical regions of Latvia in 2008-2009
(LVL, average per household member monthly)

 

Riga

Pierīga

Vidzeme

Kurzeme

Zemgale

Latgale

2008

310

300

193

230

218

175

2009

261

231

183

191

188

160

2009as % over 2008

84

77

95

83

86

91

Due to the reduction of overall income level the structure of household income has changed rather noticeably.

Structure of household disposable income in 2004-2009

(in per cent)

Households of self-employed and wage and salary earners were the most influenced by the economic recession.

Reduction of the income has influenced households of all income groups. Income dynamics of the households in breakdown by quintile groups4 is characterised in the following table:

Household disposable income by quintile groups in 2004-2009
(LVL, average per household member monthly)

Quintiles

2004

2005

2006

2007

2008

2009

1

34

38

55

70

80

70

2

64

71

92

121

143

141

3

81

95

125

175

201

183

4

114

138

178

259

294

252

5

230

288

336

522

576

474

 

In 2nd quintile group, where share of pensioners is considerably higher, reduction of income was rather insignificant, but income of the households of 4th and 5th quintile groups have decreased more – compared to 2008, in 2009 their income have diminished by 14% and 18%, respectively.

 

Prepared by Social Statistics Department
Tel. 67366908
Edmunds Vaskis

 

Methodological explanations

 

1In EU-SILC 2010 survey 6.3 thousand households were surveyed and 13 thousand respondents aged 16 years and over were interviewed.Data in income were compiled on 2009.

2Social transfers are pensions and benefits paid by state, municipality or other country, state alimony, scholarships, benefits and compensation covered by social insurance, including other country.

3Disposable income is cash income from labour; employee income in kind estimated in cash. income or losses received from self-employment, received pensions and benefits; material assistance from other households; profit from interests of deposits, dividends, shares; income received by children under age of 16; income from property rental; amount received from State Revenue Service due to overpaid income tax (foe business activities, eligible costs – education, medical treatment etc.). Of this total amount of income real estate tax is deducted as well as amount of money regularly given to other households, amount paid to State Revenue Service due to unpaid or insufficiently paid income tax.

4Quintile – one fifth (20%) of the number of the surveyed households, which are grouped in growing sequence by disposable income per one household member.The lowest (first) quintile includes one fifth of the households with the lowest income, bet the highest (fifth) - one fifth of the households with the highest income.