Inequality of income distribution (2016)

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Inequality of income distribution

(income quintile share ratio)

(EU27/28, EA19 and Member States) (2005, 2010 and 2016)

The income quintile (or S80/S20) ratio calculates the ratio of total income received by the 20% (or quintile) of the population with the highest income to that received by the 20% (or quintile) with the lowest income. The higher the income quintile ratio, the higher income inequality is. The EU/EA figures reflect the average of the national S80/S20 ratios, weighted by population size and not the ratio of the top to bottom quintile shares in the EU/EA, which can be expected to be higher, as it would be when also taking into account differences in income distribution between countries.

The inequality of income distribution in the EU28 (EU27 for 2005, for which there is no data available for Croatia) has increased since 2005, and after 2010 the richest 20% of the population earned at least five times more than the poorest 20% (see Figure 3.1). Income inequality rose more in the EA19 than it did in the EU28 between 2005 and 2016. There have been large variations across countries (see Figure 3.1). In Czechia, Slovakia, Slovenia, Finland and Belgium the income quintile ratio in 2016 was 3.5-3.6 whereas in Bulgaria it was 7.9, in Romania 7.2 and in Lithuania 7.1. What is interesting is that in the EA19, on average, the S80/S20 ratio remained stable during the early years of the crisis (2008-9) and started increasing from 2010 onwards, when there was a shift in EU/
EA policies towards fiscal austerity.

The indicator has not changed since 2014. There is evidence of non-negligible increases in income inequality between 2005 and 2016 in specific Member States, such as Bulgaria, Sweden and Luxembourg, among others, and between 2010 and 2016, income inequality also rose substantially in Italy, Greece, Hungary and Romania. By contrast, between 2005 and 2016, income inequality declined in Poland. The coefficient of variation (based on the EU27/28 weighted average) suggests that while divergence in income inequality within the EU28 was lower in 2013 compared to 2005 (21.6 vs. 25%), it increased from 2013 to 2016 (23.7%).

source: Eurostat – ETUI

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