Latvia ranks quite high for income inequality

Latvia is in the top three in the European Union when it comes to income inequality, according to data published by Eurostat July 4.

Across nearly all EU Member States, the 20 % of the population with the highest disposable income (the top or fifth quintile) accounted for at least one third of total income, a share that in 2020 reached a peak of 46.2 % in Bulgaria. The only exception was Slovakia, where the share was 31.2 %.

In 2020, the highest 20 % of earners in Bulgaria, Lithuania and Latvia received 40.0 % or more of the disposable income within their respective countries.

By contrast, the 20 % of the population with the lowest income (the bottom or first quintile) accounted for less than one tenth of total income in the vast majority of EU Member States. Exceptions were observed in Czechia and Slovakia (both 10.3 %), as well in Slovenia (10.1 %).

Income distribution in Latvia, 2020

People in the bottom quintile of the income distribution received less than 8.0 % (which was the average in the EU Member States) of the disposable income in 12 Member States. Among those Member States, shares below 7.0 % were recorded in Lithuania, Italy, Spain, Latvia, Romania and Bulgaria (where the lowest share of 5.8 % was recorded). 

Income inequality is measured by the so-called 'Gini coefficient' which gives the extent to which the distribution of income within a country deviates from a perfectly equal distribution. The Gini coefficient was above the EU average in 12 Member States, including Latvia.

A Gini value of 100 % means that only one person receives all the income in the country, while a Gini value of 0 % means that income is distributed equally across the population.

"Bulgaria (40.0 %), Lithuania (35.1 %), Latvia (34.5 %) and Romania (33.8 %) experienced, in 2020, the highest levels of inequality in disposable income in the EU," said Eurostat.

On the other hand, among the EU Member States, income was most equally distributed in Slovenia (23.5 %), and Slovakia (20.9 %).

 

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