On household disposable income in 2010

25.01.2012

Central Statistical Bureau has compiled provisional results of the ‘’EU Statistics on Income and Living Conditions” survey (EU-SILC1) on household income in 2010.

In comparison with 2009, household disposable income2 in 2010 have reduced by 5.5% or LVL 12 per household member monthly, but compared to 2008 – by 20% or LVL 52 monthly.

Changes of household disposable income in 2007 - 2010
(LVL per household member monthly)

 

All households

Urban

Rural

2007

226

250

173

2008

253

277

199

2009

213

234

169

2010

202

220

163

Disposable income has diminished in all regions of Latvia.

Household disposable income in statistical regions of Latvia in 2009 - 2010
(LVL, average per household member monthly)

The most significant reduction was observed in income from wages and salaries – compared to 2009, this type of income in 2010 has reduced by 10% (decrease of LVL 15 per household member monthly). Moreover this drop was compensated neither by the increase of received transfers3 (pensions, benefits and various social aid), nor by growth of the income from self-employment.

Already for the second year in a row the share of households the main source of subsistence of which is wages and salaries has reduced, and the share of persons receiving social transfers is growing. The share of households the main source of subsistence of which is wages and salaries has decreased from 66% (2008) and 59% (2009) to 55% (2010). In the meantime the share of households living from social transfers has risen from 29% (2008) and 37% (2009) to 40% (2010).

Due to the decrease of overall income level the structure of household income has changed rather noticeably. Whereas because of the reduction of share of income from economic activities and growth of the share of received transfers (including social transfers), the income structure since 2007 has changed to worse.

Structure of household disposable income in 2004 - 2010
(in per cent)

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

Household disposable income by quintile groups in 2007 - 2010
(LVL, average per household member monthly)

Quintiles

2007

2008

2009

2010

1

70

80

70

67

2

121

143

141

135

3

175

201

183

181

4

259

294

252

239

5

522

576

472

441

In 2010 the reduction of the disposable income was observed in households of all above income groups. Still it should be taken into account that such income drop leaves the most notable influence on the low income households.

 

Prepared by Income and Living Conditions Statistics Section
Viktors Veretjanovs
Tel. 67366609


Methodological explanations

1 In EU-SILC 2011 survey 6.6 thousand households were surveyed and 13.5 thousand respondents aged 16 years and over were interviewed. Data in income were compiled on 2010.

2 Disposable 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 (SRS) due to overpaid income tax (for business activities, eligible costs – education, medical treatment etc.
From this total amount of income the following are deducted: real estate tax, amount of money regularly given to other households, amount paid to the SRS due to unpaid or insufficiently paid income tax.

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

4 Quintile is one fifth (20%) of the number of surveyed households grouped in increasing sequence according to the disposable income per household member. [The bottom (first) quintile covers one fifth of the households with the lowest income, but top (fifth) quintile – one fifth of the households with the highest income.]