Income inequality: S80/S20

  •  30/11/2021
  • objective  
  •  assessment 
  •  SDG-I  

In 2020 (income year 2019), the S80/S20 income quintile share ratio in Belgium was 3.7. To achieve the sustainable development goal by 2030, this figure must not increase. Between 2004 and 2019 the trend is favourable (assessment of November 2021; without taking into account 2020, because the Covid-19 pandemic impacted data collection).

The chart will appear within this DIV.
The chart will appear within this DIV.

Income quintile share ratio S80/S20 - Belgium and international comparison

 200420052010201420152018201920202019//20042019//20142019//2010
Belgium3.94.03.93.83.83.83.63.7-0.5-1.1-0.9
EU27----4.95.25.25.15.0-----0.90.2
//: Average Growth Rates

break in series: BE 2019; BE 2020 data collection impacted by Covid-19 pandemic

Statbel; Eurostat (2021), European Union Statistics on Income and Living Conditions (EU-SILC), ilc_di11, https://ec.europa.eu/eurostat (consulted on 1/10/2021).

Income quintile share ratio S80/S20 by region - Belgium

 2012201420152018201920202019//2012
Brussels-Capital Region6.15.85.74.94.75.2-3.7
Flemish Region3.63.43.43.43.33.4-1.2
Walloon Region3.83.73.73.83.63.5-0.8
//: Average Growth Rates

The margin of uncertainty for this indicator is indicated in the text for the latest year. Break in series: 2019; data collection 2020 impacted by the Covid-19 pandemic

Statbel (2012), SILC Quality Reports 2011, https://statbel.fgov.be/nl/themas/huishoudens/armoede-en-levensomstandigheden/risico-op-armoede-sociale-uitsluiting/plus (consulted on 14/10/2019) and Statbel (2021), direct communication, 21/06/2021.

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 survey methodology has been thoroughly reviewed for better accuracy. 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, 2021). 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 2019 it fluctuated around 5; in 2019 it was 5.1. 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 2019. In that year, the Czech Republic and Slovakia both ranked first with 3.34 and Bulgaria last with 8.1.

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

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