Income inequality: income quintile ratio (S80/S20)


Source 

European Union Statistics on Income and Living Conditions (EU-SILC), Statbel & Eurostat, processed by Statistics Flanders


Definitions 

The income quintile ratio (S80/S20) is the ratio of the share of the 20% of persons with the highest household income in total household income to the 20% of persons with the lowest household income in total household income. 

Household income: the disposable household income consists of all income of the household members derived from economic activity, assets, property ownership and from social transfers (social security and welfare benefits).

It always refers to the standardised net disposable household income. In order to be able to compare the incomes of households of different sizes and composition, the total household income is standardised. This is done by dividing the total household income by a Eurostat equivalence factor. The first household member has the weight of 1. For each additional person aged 14 years and over in the household, this factor is increased by 0.5, and for each child aged under 14 years, by 0.3. 

The years in the figure refer to the year in which the survey is conducted. The income quintile ratio is calculated on the basis of the total disposable annual income of the household in the year preceding the survey.  


Remarks on quality 

The data on the income quintile ratio are estimates based on a survey. This is the EU-SILC survey on income and other living conditions, the aim of which is to produce comparable statistics within the European Union for, among other things, poverty and social exclusion. 

The implementation of the EU-SILC survey has been compulsory since 2004 for all countries by means of a European regulation. EU-SILC is coordinated by the European statistical office Eurostat and implemented for Belgium by the Belgian statistical office Statbel. It is a survey of a sample of private households taken from the National Register, whereby the reference person of the household (head of household) and each household member aged 16 years and over are interviewed. Since 2004, EU-SILC has been developed as a 4-year rotating panel. This means that every year a quarter of the households are replaced by a new sample of households.

The response rate of the EU-SILC survey in Belgium is about 60%. In the Flemish Region, data are collected via the household and individual questionnaire for some 7,000 people. 

A margin of uncertainty must be taken into account when interpreting the results of the EU-SILC survey. The smaller the sample on which the figures are calculated, the greater the margin of uncertainty. The margins of uncertainty shown in the figure have been calculated by Statbel. An estimate based on the margins of uncertainty in the other years is used for the years for which Statbel's margins of uncertainty are not available (2004-2011). 

In addition, certain vulnerable population groups (such as persons in collective households, persons without legal residence permits or the homeless) are not or hardly represented in the survey.


References

Statbel: EU-SILC-survey

Eurostat: Database


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