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Friday, 29.03.2024, 16:32
Latvia: In 2018, household disposable income increased by 11.7%
During a year, more rapidly than on average in Latvia, income per household member has increased in Latgale – by 13.8% (376 euros per month), in Zemgale – by 13.3% (501 euro per month) and in Riga – by 13% (669 euros per month). In Pieriga income has risen by 10.2% (591 euro per month). Slower income growth was registered in Kurzeme – by 8.5% (467 euros monthly) and in Vidzeme – by 7.4% (431 euro per month). In urban area growth comprised 10.9% (575 euros per month) and in rural area – 13.6% (483 euros per month).
In 2018, household income from labour per household member rose by 10.5% – from 352 euros a month in 2017 to 389 euros a month in 2018. However, income from social transfers2 (pensions, allowances and other budgetary payments) per household member grew by 11.2% (from 112 euros a month to 125 euros a month).
The share of income from labour amounted to 71.3% of the total disposable income and the share of social transfers amounted to 22.9%.
In 2018, compared to 2017, the most rapid increase in income was observed in the poorest households (1st quintile group) and in the richest households (5th quintile group). For these households income growth comprised 14.3% and 12.7%, respectively. But the slowest income growth was observed in households with average income (3rd and 4th quintile groups). Income of these households rose by 10.7% and 11.6%, respectively.
Household
disposable income by quintile group3; 2009–2018
(on average per household
member monthly; EUR)
Quintile
group |
2009 |
2010 |
2011 |
2012 |
2013 |
2014 |
2015 |
2016 |
2017 |
2018 |
Income
increase in 2018,
compared to 2017, % |
1st (poorest households) |
100 |
97 |
105 |
112 |
125 |
135 |
150 |
154 |
162 |
186 |
14.3 |
2nd |
202 |
194 |
199 |
209 |
228 |
245 |
257 |
266 |
285 |
320 |
12.3 |
3rd |
259 |
257 |
260 |
272 |
295 |
317 |
340 |
360 |
401 |
444 |
10.7 |
4th |
355 |
338 |
352 |
372 |
413 |
449 |
483 |
514 |
572 |
638 |
11.6 |
5th (richest households) |
668 |
620 |
681 |
701 |
780 |
847 |
896 |
942 |
1076 |
1213 |
12.7 |
National average |
303 |
286 |
305 |
320 |
354 |
387 |
417 |
437 |
489 |
546 |
11.7 |
The Gini coefficient of Latvia has reduced slightly (from 35.6% in 2017 to 35.2% in 2018) and income gap between the poorest (1st quintile group) and the richest (5th quintile group). Growth of income has been promoted by rise in minimum wages and salaries (from 380 euros in 2017 to 430 euros in 2018), as well as by changes in legislation of social benefits (recalculation of separate pensions, greater support to foster families and families with two and more children). This slightly reduced individual income gap between the poorest and the richest.
In 2018 income of the richest population was 6.5 times higher than that of the poorest population, but in 2017 this gap comprised 6.8 times.
Compared to other European Union (EU) Member States6, the income inequality level in Latvia remains high. According to the latest data, the Gini coefficient of Latvia was the third highest among EU Member States. In 2017, the coefficient was higher only in Bulgaria (39.6 %) and Lithuania (36.9 %); the average coefficient of EU amounted to 30.9 %. The quintile share ratio was the fourth highest in the EU. Higher quintile share ratio in 2017 was in Bulgaria (7.7), Romania (7.2) and Lithuania (7.1), while the EU average amounted to 5.2.
Household disposable income data source: survey on income and living conditions conducted by the CSB in 2019 (EU-SILC – EU Statistics on Income and Living Conditions). The survey covered 5.3 thousand households and 9.6 thousand respondents aged 16 and over. CSB will collect data on household disposable income in 2019 within the framework of the 2020 survey.