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International Internet Magazine. Baltic States news & analytics Friday, 29.03.2024, 16:32

Latvia: In 2018, household disposable income increased by 11.7%

Liene Āboliņa Senior OfficerSocial Statistics Data Compilation and Analysis Section, 16.12.2019.Print version
Results of the survey conducted by the Central Statistical Bureau (CSB) in 2019 show that, compared to 2017, in 2018 household disposable income1 increased by 11.7%, reaching 546 euros per household member monthly. For the second year in a row, the growth rate of population income has been above 10% (11.8% – in 2017).



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.






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