Definition: the inter-quintile ratio of population income is an income inequality indicator. It is the ratio between the total equivalised net disposable income of the 20% of people having the highest income (S80) and the total equivalised net disposable income of the 20% of people having the lowest income (S20). The net equivalent disposable income is used to calculate this indicator. Net disposable income is equal to the sum of gross incomes of all household members minus taxes, social contributions and inter-household transfers (EC, 2016). To obtain the net equivalent disposable income, the net disposable income is divided by an equivalence factor (the so-called modified equivalence scale of the OECD). An adult has a factor of 1, each additional person above 14 years old a factor of 0.5 and each additional person under the age of 14 a factor of 0.3. The net equivalent disposable income allows the standard of living of persons to be compared, taking into account the economies of scale resulting from a joint household and the composition of the family.

Income inequality data used here are based on the Statistics on Income and Living Conditions survey (EU-SILC) of the European Union. Income data are related to the income of the year preceding the survey year. This means, for example, for the survey year 2020 that in the calculation of this indicator the incomes of 2019 were used, which were not affected by the Covid-19 crisis (Statbel, 2021a).

Statbel organises this EU-harmonised survey in Belgium and makes the results available, in particular to Eurostat. 2004 is the first year for which European harmonised data have been collected in order to calculate the indicator. The data used here come from Eurostat, which publishes detailed and comparable results between EU Member States. Since these data are based on surveys, a margin of uncertainty must be taken into account. This margin of uncertainty increases as the indicator is calculated on smaller sub-populations. The confidence intervals for these data are available on request from Statbel.

From 2019 onwards, the methodology of the survey has been thoroughly revised for better accuracy. Therefore, the data collected until 2018 are not comparable with those collected from 2019 onwards. In 2020, the Covid-19 pandemic impacted data collection. This makes it difficult to compare the results of SILC 2020 with those of previous years. (Statbel, 2021b). Therefore, they are not used to calculate and evaluate the long-term trend.

Goal: the inter-quintile income ratio must not increase.

The Sustainable Development Goals or SDGs adopted by the UN in 2015 include target 10.4: “Adopt policies, especially fiscal, wage and social protection policies, and progressively achieve greater equality”.

The Federal Long-Term Strategic Vision for Sustainable Development sets out that “Promoting the well-being of each individual, it will be essential that an inclusive society tackles the issue of poverty and social inequality” (introduction to the challenge “A society that promotes social cohesion”, Belgian Official Gazette, 08/10/2013).

Since a comparison with the other EU Member States shows that the inter-quintile income ratio is low and remained stable in Belgium, it can be considered that in order to contribute to meeting the challenge of the Federal Strategic Vision and the SDG target, the inter-quintile income ratio, as a measure for income inequality, must not increase.

International comparison: the inter-quintile income ratio within the EU27 is higher than in Belgium. Between 2004 and 2022 it fluctuated around 5; in 2022 it was 4.7. There are large income inequality differences between EU27 Member States: countries most affected by the economic crisis continue to suffer from high income inequality, while it remained rather stable and low in Belgium (EU, 2019; Federal Public Service Social Security, 2018). When Member States are divided into three groups, Belgium is part of the group with the best performance in 2022. In that year, Slovakia ranked first with 3.1 and Bulgaria last with 7.3.

UN indicator: the selected indicator does not correspond to any monitoring indicator for the SDGs but is related to target 10.4. The inter-quintile income ratio is an income inequality indicator that is determined, among others, by fiscal, wage and social protection policies.

Sources

• General

  • SDGs, Sustainable Development Goals: United Nations (2015), Transforming our world: the 2030 Agenda for Sustainable Development. Resolution adopted by the General Assembly on 25 September 2015, document A/RES/70/1.

  • Indicators: United Nations (2017), Work of the Statistical Commission pertaining to the 2030 Agenda for Sustainable Development. Resolution adopted by the General Assembly on 6 July 2017, document A/RES/71/313.

  • UN Sustainable Development: https://sdgs.un.org/ (consulted on 18/01/2023).

  • UN Sustainable Development Goal indicators website: https://unstats.un.org/sdgs/ (consulted on 18/01/2023).

• Specific

  • Belgian Official Gazette: http://www.ejustice.just.fgov.be/cgi/welcome.pl; research on http://www.ejustice.just.fgov.be/doc/rech_f.htm (consulted on 24/09/2020).

  • EC (2016), Methodological guidelines and description of EU-SILC - Target Variables -015 operation (Version August 2016), DocSILC065 (2015 operation).

  • EU (2019), Social Protection Committee Annual Report 2018, https://ec.europa.eu/social/main.jsp?catId=738&langId=en&pubId=8151&furtherPubs=yes (consulted on 24/09/2020).

  • Federal Public Service Social Security (2018), The evolution of the social situation and social protection in Belgium 2018 - ‘Increasing pressure on social protection adequacy’- Monitoring the social situation in Belgium and the progress towards the social objectives and the priorities of the National Reform Programme, Brussels, Federal Public Service Social Security, september 2018, https://socialsecurity.belgium.be/sites/default/files/content/docs/en/publications/silc/silc-analysis-social-situation-and-protection-belgium-2018-en.pdf (consulted on 24/09/2020).

  • Statbel (2021a), Chiffres clés 2021, p. 31, https://statbel.fgov.be/fr/nouvelles/chiffres-cles-2021 (consulted on 10/12/2021)

  • Statbel (2021b), SILC FAQ, https://statbel.fgov.be/fr/themes/menages/pauvrete-et-conditions-de-vie/faq, see in particular "Y a-t-il des ruptures de séries dans la chronologie de l'enquête SILC ?" (consulted on 19/11/2021)

More information is available in French and Dutch.