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Income and Wealth Inequality

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Lorenz Curve

Figure 8.1 plots the Lorenz curves of net household wealth for 2020. This curve is a graphical representation of the relationship between the cumulative share of households (ranked according to the level of wealth from lowest to highest) and their cumulative share of total wealth.  A perfectly equal wealth distribution would be one in which each household has the same wealth, therefore 10% of households would own 10% of cumulative wealth, 20% of households would own 20% of wealth (and so on). This scenario is depicted in Figure 8.1 by the 45o line, the line of perfect equality. The further away a curve is from the line of perfect equality the more unequal the distribution.

Gini Coefficient

The Gini coefficient is a statistical measure of inequality. A Gini coefficient value of zero denotes perfect equality, indicating that wealth is distributed equally amongst all households. A Gini Coefficient of 1 would denote perfect inequality where all the wealth is held by one household. The Gini coefficient for net wealth in 2020 is 0.65.

When interpreting this figure, it is important to note that the HFCS does not capture a significant portion of household wealth in the upper percentiles (i.e. the top 1% to 2%). For example, no billionaires or households with a net wealth greater than 40 million euro were interviewed for the HFCS in 2020. We can assume that this results in an underestimation of the Gini coefficient for net household wealth.

% Cumulative HouseholdsPerfect Equality2020 Net Household Wealth
00-0.4
11-0.5
22-0.6
33-0.6
44-0.6
55-0.6
66-0.6
77-0.6
88-0.6
99-0.6
1010-0.6
1111-0.6
1212-0.6
1313-0.6
1414-0.6
1515-0.6
1616-0.6
1717-0.6
1818-0.5
1919-0.5
2020-0.5
2121-0.5
2222-0.4
2323-0.4
2424-0.3
2525-0.2
2626-0.1
27270
28280.1
29290.2
30300.4
31310.6
32320.8
33331
34341.3
35351.6
36361.9
37372.1
38382.5
39392.8
40403.2
41413.6
42424
43434.4
44444.8
45455.3
46465.7
47476.3
48486.7
49497.3
50507.8
51518.4
52529
53539.6
545410.2
555510.9
565611.5
575712.2
585812.9
595913.7
606014.4
616115.2
626216
636316.8
646417.6
656518.5
666619.3
676720.3
686821.3
696922.2
707023.3
717124.3
727225.4
737326.5
747427.7
757528.7
767629.9
777731.2
787832.5
797933.9
808035.3
818136.7
828238.4
838339.9
848441.6
858543.4
868645.1
878747.1
888849
898951.3
909053.4
919155.8
929258.3
939361.2
949464.1
959567.5
969671.4
979775.9
989881.5
999991.5
100100100
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The Gini coefficient for gross household income is 0.43 in 2020 indicating that net wealth is distributed more unequally than gross household income. See Figure 8.2.

The Survey on Income and Living Conditions is the official source of income inequality statistics, where income inequality measures are based on equivalised disposable income, rather than on gross household income.

% Cumulative HouseholdsPerfect EqualityGross Household IncomeNet Household Wealth
000-0.4
110.1-0.5
220.3-0.6
330.4-0.6
440.6-0.6
550.8-0.6
661-0.6
771.2-0.6
881.4-0.6
991.6-0.6
10101.8-0.6
11112-0.6
12122.3-0.6
13132.5-0.6
14142.8-0.6
15153.1-0.6
16163.4-0.6
17173.7-0.6
18184-0.6
19194.4-0.5
20204.8-0.5
21215.1-0.5
22225.5-0.4
23235.9-0.4
24246.3-0.3
25256.8-0.2
26267.1-0.1
27277.60
282880.1
29298.50.2
303090.4
31319.50.6
3232100.8
333310.51
343411.11.3
353511.51.6
363612.21.9
373712.72.1
383813.32.5
393913.92.8
404014.53.2
414115.13.6
424215.84
434316.44.4
444417.14.8
454517.85.3
464618.55.7
474719.26.3
484819.96.7
494920.77.3
505021.47.8
515122.18.4
5252239
535323.79.6
545424.610.2
555525.410.9
565626.311.2
575727.112.2
58582812.9
595928.913.7
606029.914.4
616130.815.2
626231.816
636332.816.8
646433.817.6
656534.818.5
66663619.3
67673720.3
686838.121.3
696939.222.2
707040.423.3
717141.524.3
727242.725.4
73734426.5
747445.227.7
757546.528.7
767647.829.9
777749.231.2
787850.632.5
797951.933.9
808053.335.3
818154.936.7
828256.338.4
838357.939.9
848459.541.6
858561.143.4
868662.945.1
878764.647.1
888866.349
898968.351.3
909070.153.4
919172.355.8
929274.158.3
939376.561.2
949478.764.1
959581.567.5
969683.871.4
979787.275.9
989890.681.5
999995.491.5
100100100100