SingStat: Household income inequality in 2019 the lowest in 20 years

On Thursday (20 Feb), the Singapore Department of Statistics (SingStat) released the figures on median household income which shows that household income inequality in the country has declined to the lowest level in almost twenty years.

The Gini index, which captures the distribution of income among individuals or households within an economy from the deviation from a perfectly equal distribution, is based on household income obtained from work per household member. In 2019, the Gini index was 0.452, which is lower than 2018 at 0.458 and the lowest since 2003.

The degree of income inequality measured by the Gini index amounts to one for perfect inequality and zero for perfect equality of income distribution.

Household income figures that were used Gini calculation also include the contribution of employer into the Central Provident Fund.

The Gini figure for 2019 dropped further to 0.398 after accounting for government taxes and transfers. SingStat reported that“this reflected the redistributive effect of government transfers”.

In 2019, median household income from work among Singapore’s resident employed household rose by 1.4 per cent in nominal terms to S$9,425, which contributed to the decline in inequality. This median household income figure is higher than the S$9,293 in 2018. This is a 1 per cent increase in real terms.

A resident employed household is headed by a permanent resident or a Singapore citizen and has at least one person who is employed.

The median monthly household income from work of resident employed households rose 2.5 per cent or 13 per cent cumulatively per year in real terms from 2014 to 2019.

Median monthly household income from work increased by 4.3 per cent in real terms or 4.8 per cent in nominal terms to S$2,925 in 2019, which is higher than S$2,792 in 2018.

As for the median monthly household income per household member, it rose by 4.1 per cent per year in real terms or 22.2 per cent cumulatively from 2014 to 2019.

At the same time, in 2019, real growth in average household income from work per household member was seen for resident employed households in all income groups.

Households in the first to 90th percentile income groups experienced real growth of 3.5 per cent to 3.6 per cent, which is more than the real growth experienced by households in the top 10 per cent income group at 0.4 per cent.

According to SingStat, on average, resident households, including those without working individuals, received S$4,682 per household member from government initiatives last year. Specifically, on average, the government gave out S$10,548 per household member to resident households in one and two-room HDB flats. This amount is more than double than the transfers given to those living in other housing types.

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