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In 2016, household disposable income in urban areas increased by 4.2%, reaching 467 euros monthly. In rural areas, the indicator rose more rapidly – by 6.7%, reaching 372 euros monthly. Regional breakdown indicates notable differences in monthly household income per household member. The largest growth in household disposable income was recorded in the Pierīga region – of 7.2% (478 euros monthly), while the lowest increase was observed in the Kurzeme region – of 1.8% (396 euros monthly). Income in Riga grew by 3.7% (528 euros monthly), in Zemgale – by 4.9% (386 euros monthly), in Latgale – by 5.6% (300 euros monthly), in Vidzeme – by 6.7% (366 euros monthly).

In 2016, household income from labour per household member rose by 6.1% – from 293 euros a month in 2015 to 311 euros a month in 2016. Income from social transfers² (pensions, allowances and other budgetary payments) per household member grew faster than income from labour for the first time since the financial crisis – by 6.6% (from 101 euros a month in 2015 to 108 euros a month in 2016). 

In 2016, the share of income from labour amounted to 71.2% of the total disposable income (70.4% in 2015), while the share of social transfers amounted to 24.7% (24.3% in 2015).  

In 2016, compared to 2015, the lowest increase in income was observed in the poorest households (by 2.8% in households of the 1st quintile group and by 3.6% in households of the 2nd quintile group). The income of the richest households, belonging to the 5th quintile group, increased by 5.1% over the year. The largest growth in income was recorded in households of the 4th and 3rd quintile groups (by 6.4% and 5.7%, respectively).

Household disposable income by quintile group; 2008–2016

The Gini coefficient of Latvia did not change over the year (34.5%), while the income of the 20% of the richest population was 6.3 times higher than that of the 20% of the poorest population (6.2 times higher in 2015).

Income inequality indicators; 2011–2016

Compared to other European Union (EU) Member States⁶, the income inequality level in Latvia remained high. According to the latest data, the Gini coefficient of Latvia wat the fourth highest among EU Member States. The coefficient was higher only in Bulgaria (38.3% in 2015), Lithuania (37.0% in 2015) and Romania (34.7% in 2015), while Spain had the same indicator as Latvia (34.5% in 2016), and the average coefficient of EU amounted to 30.8% (in 2015). The quintile share ratio was also one of the highest in the EU (7.9 in Bulgaria (2015), 7.2 in Romania (2015), 7.1 in Lithuania (2015), 6.6 in Spain and in Greece (2015), 6.3 in Italy (2015) and 6.3 in Latvia (2016), while the EU average amounted to 5.2 (2015)).

Household disposable income data source: survey on income and living conditions conducted by the CSB in 2017 (EU-SILC – EU Statistics on Income and Living Conditions). The survey covered 6 thousand households and 11.3 thousand respondents aged 16 and over. CSB will collect data on household disposable income in 2017 within the framework of the 2018 survey, and respondents will have the possibility to fill in the questionnaire online.

More information on the data of the survey conducted in 2017 is available in the Personal Income section of the CSB database.

Methodological explanations

¹ Disposable income (net) is cash income from labour, employee income in kind received by using a 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.).

² Social 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 A quintile group is one fifth (20%) of the number of the surveyed households grouped in increasing sequence according to the disposable income per one household member. The bottom (first) quintile includes one fifth of the households with the lowest income, while the top (fifth) quintile comprises one fifth of the households with the highest income level.

⁴ The Gini coefficient characterises income inequality. It varies from 0 to 100. Gini coefficient amounts to 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 inequality of income.

⁵ Quintile share ratio (S80/S20) is the 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 the survey conducted in 2016 are available in the Eurostat database: Quintile share ratio, Gini coefficient, while national data on the survey conducted in 2017 are available in the CSB database: Population and Social Processes.